warby

No

There is a simple rule of thumb for a new build: a. any contractor who is vat registered MUST invoice you with zero vat for all materials, labour, hire fees, etc.. b. For any contractor who is NOT vat registered then you MUST purchase, be invoiced for and pay for all materials including paying the vat on those invoices. At the end of the project you complete a vat return to claim back the vat element you have previously paid out but VAT on some charges is not recoverable, e..g on fees, hire charges, etc. If you organise your contracts carefully most of the irrecoverable VAT can be avoided. You do this by arranging for a vat registered contractor to contract and pay for fees, hire, etc. You then get invoiced with zero vat.

Unless you are very business savvy, you will be entering a minefield. Avoid. There are Contract, Vat, Tax and H&S implications depending upon the status of the labourers. Your project will dictate the VAT implications, e.g. if it is a new build or renovation.

I agree with most of the advice you have received. I would add if the builder is not VAT registered you have a major problem and if this is the case you MUST have all invoices addressed to you and YOU must pay for them not the builder as you you not be able to recover the VAT on the materials.

Avoid having an internal DHW cylinder inside the property because you don't want a inside heat source in the heat. Use solar PV; surprisingly little in Spain. Solar thermal tanks are very common. Bear in mind electricity is very much more expensive than in the UK. Mains gas is rare, LPG is common but mainly for cooking. Have an external hot water tank on the roof to supply DHW. In-line hot water heaters and electric showers are normal in hot climates. Use external shutters for solar shading. Don't forget a pool and the best ways for maintaining water quality and minimizing maintenance and running costs. For 4 months in the winter it will be too cold unless you plan in heating at the design stage. You will need both a English speaking solicitor and accountant in Spain. Tiled flooring throughout is normal. Bear in mind the colour of the tiles you use; particularly if it is subject to solar gain. Tiles are cheap. Most properties have out of necessity, wrought iron security protection on all external doors and windows; burglary is far worse in Spain. You need as much cross ventilation as possible and A/C in main rooms and bedrooms for cooling and heating in winter, Plumbing is diabolical in some places, make sure you have non-return valves on your sewage outlets. Flooding is common in winter, hence why that have so many dry river beds. ensure you make provision to protect your property, We were in a national flood disaster zone last year, it was a very sad site. In winter there are cold spells when you need solar gain and a source of heat, do not under estimate this requirement it is very important; we spend two winter months every year in Spain. Use a decent internet supply and use this for TV, you will need a special TV box, dare I say with KODI, and perhaps a large satellite dish. I doubt you need a Telephone landline now that roaming charges have been cancelled in the EU, we use WIFI and messenger/whatsapp for calls, we use video calling all the time when calling UK and it is all free, except normal internet charges. Consider using passive cooling by having a large vent in the top part of your roof , insect mesh and then a top hat above vent. Have insect mesh on windows and consider inward opening windows; mosquitoes are a real problem in some areas. In Florida they have a insect mesh around the whole of the pool and Lanai because the insect problem is so great. Suggest you join "expats in Spain" website - ask your questions there and for getting tradesmen. That will lead you onto other forums more specific to the areas you are considering. Consider using "DOYOUSPAIN.com" for car hire, very cheap in Winter , £5 per day inclusive, just booked it Good luck.

+1 to Jeremy's comment - I was recommended by the local ratman to use galvanised chicken wire and push into into rainwater downpipes to prevent them climbing up.

Try this: and this http://www.designingbuildings.co.uk/wiki/Self-build_home:_Prepare_for_construction go onto other sections for other items This was started but never finished on ebuild: http://www.ebuild.co.uk/blog/39/entry-371-check-list-index-and-summary/#comment_1831 and this: https://s3.eu-central-1.amazonaws.com/centaur-wp/homebuilding/prod/content/uploads/2012/04/a-self-builders-checklist.pdf

Saving money on VAT is only possible by using non-VAT registered trades and doing some real smart buying This quote is nonsense, suggest it is removed. I have already made suggestions on this forum and on ebuild on many ways to save vat

I agree wholly with Colin (Temp). I would add there are ways of recovering vat on fees and hire if those services are 'employed' by vat registered contractors who you subsequently pay. As an example if your timberframe supplier contracts with an architect then the fees for your house can be charged to you without vat being added. This would similarly apply to say crane hire. It is very important that a self builder puts contracts together that allows this loophole to be legally exploited. When employing a non vat registered contractor you as the self builder must ALWAYS pay for the materials against an invoice addressed to you by the materials supplier. e.g. Plumbers and Electricians normal practice is to contract on a supply and fit basis, this is ridiculous to a self builder, if they are not vat registered. Arrange that their labour charge is increased to reflect that that they will lose the material profit element; this prevents them being out of pocket.

From ebuild http://www.ebuild.co.uk/topic/15595-with-hindsight-what-would-you-have-done-differently/page__p__114558__hl__mistakes#entry114558

I am sure there are many ways of cracking the problem, but the scenario I have outlined in cheap, simple and tax efficient. Perhaps if you were called "Trump" you might want to buy a limited company with accumulated tax losses and use them to offset against limited companies with taxable profits.

The VAT registered sole trader cannot also be the self builder without a lot of other problems. A VAT registered sole trader must charge vat on invoices to other customers unless it is for a new build which is zero rated. This is why most tradesman are self employed but not vat registered. I was vat registered because I could recover input vat and all of my customers were vat registered and they could recover the output vat I charged them. If you complete monthly vat returns you increase admin time/cost, I would have thought quarterly returns are more sensible on a cost/benefit basis but can be used if cashflow is very restricted. Similarly accounting for vat on invoices received is called completing the vat return on an 'accruals basis' and will help immensely, i.e. you can get the vat back either after paying the supplier BUT also before you pay the supplier if the invoices are dated (Invoice Tax Point) before the vat return end date; effectively an interest free loan for a short time. I think a self builder can also use this but I am not sure. Efficient businesses wait until the last possible date to complete their vat return to ensure they receive as many supplier's invoices as possible that are dated up to the vat return end date.

"the VAT registration threshold" is irrelevant, you can voluntarily apply to be vat registered, similarly you can choose to account for vat based on invoices received (not necessarily paid) or invoices paid; the former can give a very much better cashflow and is the most common method of recovering input vat for businesses, it can also help self employed people. I have never been a self builder, nor have I been an accountant or auditor of a builder, so my knowledge about this sector is Limited (pun intended). Any individual, but not the self builder, can set up as a vat registered, self employed person, it is VERY easy. But if they decided after building one property at a loss, there is nothing stopping them closing down that business, no tax should be payable. A person with a personal tax allowance that is not fully offset against income gives further scope, i.e. some one who is normally a non tax payer. A self employed person can recover more vat (only a minor advantage) than a self builder but more importantly they can recover vat earlier, a significant cashflow improvement and can be recovered in a less onerous way, i.e. A self employed vat return is much easier to complete than the self builder's vat return. I believe a builder has significant advantages over a self builder; this proposal merely levels the playing field slightly. I have previously suggested to Admin that parliament needs lobbying about this unfair treatment of self builders.

Can I remind you of two points I raised: "the builder and self employed person need to be different people" and "a limited company is not required". Nobody needs to "to learn how to set up a company". A self employed person is not restricted by what you call "the HMRC VAT reclaim scheme" for self builders - so yes I agree with you, you are mistaken. I do not understand your comment "there were some concerns over how VAT would be managed" and I have completed hundreds of vat returns. .

I strongly disagree; the cost is not "so high as to make it a pointless exercise.". A self employed person, acting as builder does not need to have an accountant nor do they require any audit charges; a limited company is not required. They do need to maintain accounts but so does a self builder to recover vat after the build is completed. There are major advantages of employing a vat registered self employed builder to build a house for a self builder in that the builder can submit very simple vat returns on a monthly or quarterly returns which has significant cashflow assistance and avoids bank interest charges on overdrafts and credit cards. The self builder would not need to complete the ridiculously complicated vat return, and stupid vat recovery rules because all vat would be recovered by the builder who has less onus to prove the vat claimed is justified. The builder can also recover vat for business petrol and can recover a proportion of their house costs used for a study in their income tax return, a self builder cannot. The builder invoices the self builder with zero vat; the builder and self employed person need to be different people. Provided the builder does not make a profit there is no further taxation payments. Setting up an individual as a self employed person has no setup costs and minimal admin costs; this is what I and millions of others have done. Closing a self employed person's business costs nothing. The self employed builder in this scenario will only have to submit one tax return. A self employed person can close down the business with one letter to HMRC; I know because this is what I did, I was self employed Accountant and Management Consultant.