The tax regime favours house building on green-field sites at the expense
bringing redundant buildings back into use
At present, you cannot normally claim a VAT refund for labour,
goods and materials used in the alteration or enlargement of an
existing building, you will have to pay the full rate of 17.5% -
while a new building is zero-rated.
However, it is possible for private individuals planning a
self-build, conversion or renovation project to claim back VAT as
long as your project meets the criteria and you follow the correct
procedures. HM Customs & Excise publish guides on the subject and
you can download all the relevant forms from the Customs & Excise
website.
What the DIY or self-builder can claim for is usually quite
straightforward, if in any doubt you should seek more advice from
your local Customs & Excise office. Here are some key points.
You can present a claim for:
- A new house which is a private domestic
residence.
- Conversions - unlike new build, you do have to pay VAT on labour
and materials costs but it is usually possible to claim it back on
completion of the project as long as it meets the right criteria.
- Renovations – same as conversions but only if the building has
been unoccupied for at least 10 years.
- Unoccupied Renovation - a 5% VAT rate is applied to renovating
dwellings which haven’t been occupied for 3 years, converting an
existing property into multiple dwellings, converting to a care home
or bedsits.
- If your building is listed, you may not have to pay it on
approved alterations. The rules here are complicated and may depend
on the interpretation of listed building consent by your local
planning authority and Customs and Excise office.
You cannot claim for:
- Fittings such as furniture, carpets,
curtains, white goods and burglar alarms.
- Landscaping and gardens trees and plants.
- Equipment hire, tools or the transport of materials.
- Professional fees (unless they are part of a total design and
build contract)
Remember:
- Keep all your receipts – and check invoices
from contractors to ensure they have charged VAT correctly at the
appropriate rate.
- If you using a prefabricated house kit send in the
manufacturer's specification listing all the items in the kit with
your claim -it's not necessary to list the items again.
- Fitted furniture is not eligible - but storage units are if
designed as part of the fabric of the building.
- Complete all work before the main dwelling is signed off -
labour and materials for driveways, paths, patios, retaining walls
can only be claimed for if it is done during the build or
conversion.
- Claim within 3 months of completion - within three months of you
having received a completion certificate from the Building Control
Office.
- Make sure you get it right first time as only one refund
application can be made. Rules and criteria do change therefore
always seek expert advice.
5th July 2005
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