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VAT on outbuilding


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I have planning approval for a main house and a garden room (actually a four roomed annexe). If my reading of the VAT reclaim document is correct, I can only reclaim the VAT back on the main house and not the separate annexe. However, if a builder does work in the construction of said annexe, is this zero rated?

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If the garden room is a separate building then you are right. See para 17 on page 8 of the reclaim form...

https://www.gov.uk/government/uploads/system/uploads/attachment_data/file/487894/VAT431NB_form_and_notes.pdf

 

If the garden room is attached to the house then it might depend on how each room is labeled on the plans. Labelling it as an annex might be a mistake. Likewise rooms that aren't normally included in a house (such as a workshop) might be refused.

 

If you employ a builder to build the house and garden room then it's very likely the builder will just zero rate the lot. I'm not clear if he should/shouldn't but try VAT notice 708.

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Sorry - meant as a VAT registered trader. They will look through all of your invoices and check what you say you have sold so may pick up on a zero rate one and check. 

 

Mine picked up that my VAT was out by 1p on an invoice due to how it was calculated ..... 

 

Is your builder supplying all materials as its only self build VAT claims where I believe they check at a certain level - IE does a 150sqm house really have 2000m of timber in it etc. It's a lovely mine field that I sadly will avoid as conversions aren't VAT exempt... 

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It's a lovely mine field that I sadly will avoid as conversions aren't VAT exempt... 

 

Not exempt but conversions do end up zero rated if they qualify....  

 

New builds - Labor is zero rated to you so no need to reclaim. Materials are 20% rated to you, which you reclaim.

Conversions - Labor is 5% rated to you, which you reclaim. Materials are 20% rated to you, which you reclaim.

 

So in effect both end up zero rated. See notes at the end of the reclaim form for conversions...

 

https://www.gov.uk/government/uploads/system/uploads/attachment_data/file/487887/VAT431C_form_and_notes.pdf

 

Also..

https://www.homebuilding.co.uk/conversion-renovation-vat-2/

 

 

Quote

 

Conversions

Conversions are zero-rated but the rules governing the payment and recovery of VAT are slightly different to those applied to new build. With conversions, labour-only or supply-and-fix contracts attract a reduced VAT rate of 5%.

As with new build, if the self-converter purchases materials on their own account they will have to pay out VAT at the full rate. But then they can recover this, together with the 5% paid out to builders or subcontractors, at the end of the project.

 

 

 

 

 

 

 

Edited by Temp
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