vat or no vat

[James94]

Hi all, just a quick one - we recently had a local haulage company supply a HIAB and operator for a day to lift our roof trusses should I be paying VAT? 

 

Take a look at the invoice I have received and let me know what you think, they are insisting I can claim it back at a later date, I’m not so sure.

 

Thanks James 

 

 

[ProDave]

I would say no. You were paying them labour for work on a new build. You cannot claim that back.

 

Send them a cheque for the net amount with a covering letter explaining that  it is work on a new build house and so they should have zero rated it.  By sending the net payment they can't accuse you of withholding payment.

[newhome]

22 hours ago, James94 said:

Hi all, just a quick one - we recently had a local haulage company supply a HIAB and operator for a day to lift our roof trusses should I be paying VAT? 

 

If hired with an operator the job should be zero rated. 

 

This is shown in VAT Notice 708:

 

Quote

3.4.2 Goods on hire

Goods hired on their own are always standard-rated. Examples include the hire of:

• plant and machinery (although plant hired with an operator can be zero-rated where all the conditions in sub-paragraph 3.1.2 are met)

 

VAT Notice 708

 

This is also made clear in HMRC's internal manual:

 

HMRC Internal Manual

 

It must be zero rated at source as there is no way of you claiming it back afterwards. The VAT reclaim scheme is for materials only. You will need to tell them to refer to VAT Notice 708 and zero rate the invoice. 

 

[Oz07]

Surely these rules apply to individuals only.

If a contractor was to hire a plant operator and machine and the sub contract operator charged the contractor VAT, contractor could still reclaim quarterly and zero rate invoice to individual?

Sorry I know this digresses from OP post 

[James94]

Thanks for your advice, I have sent off a covering letter along with the cheque. Now I’ll wait for a response.

 

[Rob99]

I'd expect the hire company to be sensible and just re-issue you with a zero rated invoice. After all, if he charges and collects the VAT from you he has to pay it over to HMRC anyway.

[Thedreamer]

45 minutes ago, Rob99 said:

I'd expect the hire company to be sensible and just re-issue you with a zero rated invoice. After all, if he charges and collects the VAT from you he has to pay it over to HMRC anyway.

That's 100% correct.

 

But often some contractors have the 'mentality' like they are running the risk of zero rating as they wouldn't want to be told later during an inspection that they should have charged VAT, which obviously wouldn't be the case in this circumstance.

[Temp]

In some situations VAT 708 requires the purchaser to provide a "certificate" to the person or company making the supply. I dont think self builders are ever required to do so but it might help convince the supplier if you issue one anyway. The certificate is basically just a letter stating the work was done on a new dwelling and providing details of the project including your planning reference number. 

 

Think there is a template in Vat 708 and didn't someone post their version on this forum some time ago?

[newhome]

4 hours ago, Temp said:

Think there is a template in Vat 708 and didn't someone post their version on this forum some time ago?

 

Yes it’s in the VAT sub forum but the OP won’t be able to access that yet as access needs 10+ posts. 

[scottishjohn]

ok next question

ruin that has full walls -but nothing else  and you are rebuilding basically as it was 

Do i understand correctly that there will not be full vat reclaim ,only 5 %

If so then why would you not flatten and rebuild from scratch ?

[Ed Davies]

1 hour ago, scottishjohn said:

If so then why would you not flatten and rebuild from scratch ?

Because the planners won't let you?

[newhome]

2 hours ago, scottishjohn said:

 

ruin that has full walls -but nothing else  and you are rebuilding basically as it was 

Do i understand correctly that there will not be full vat reclaim ,only 5 %

If so then why would you not flatten and rebuild from scratch ?

 

Dwellings that have not been lived in for at least 10 years or barns etc. that are being converted into dwellings should be eligible for the VAT reclaim scheme the same as a new build. The difference is that labour and supply & fit arrangements are not zero rated for these properties and a 5% rate applies. That 5% is reclaimed through the VAT reclaim scheme so they end up being in the same position as a new build.

 

The 5% rate also applies to buildings that have been empty for 2+ years but in that case there is no reclaim scheme and the owner has to pay 5% VAT. 

[scottishjohn]

58 minutes ago, newhome said:

 

Dwellings that have not been lived in for at least 10 years or barns etc. that are being converted into dwellings should be eligible for the VAT reclaim scheme the same as a new build. The difference is that labour and supply & fit arrangements are not zero rated for these properties and a 5% rate applies. That 5% is reclaimed through the VAT reclaim scheme so they end up being in the same position as a new build.

 

The 5% rate also applies to buildings that have been empty for 2+ years but in that case there is no reclaim scheme and the owner has to pay 5% VAT. 

5% is alot different than 20% though 

 maybe iam picking you up wrong

you are saying that 5% will apply ,but you can reclaim that so in effect it will be zero vat on materials to build ?

Edited August 5, 2019 by scottishjohn

[newhome]

8 minutes ago, scottishjohn said:

5% is alot different than 20% though 

 maybe iam picking you up wrong

you are saying that 5% will apply ,but you can reclaim that so in effect it will be zero vat on materials to build ?

 

Yes that's correct - for a dwelling unoccupied for 10+ years or a conversion. The reclaim form is VAT431C. 

 

If you buy your own materials 20% VAT applies but just as for a new build that can be reclaimed for eligible materials. The 5% rate only applies to labour or supply & fit. 

 

VAT431C

 

 

[recoveringbuilder]

4 minutes ago, newhome said:

 

Yes that's correct - for a dwelling unoccupied for 10+ years or a conversion. The reclaim form is VAT431C

 

VAT431C

 

 

So how can this work with materials?

you're not going to be able to get suppliers charging you only 5 pc ?

[newhome]

6 minutes ago, Christine Walker said:

So how can this work with materials?

you're not going to be able to get suppliers charging you only 5 pc ?

 

I added that bit when you were writing I think 

 

12 minutes ago, newhome said:

If you buy your own materials 20% VAT applies but just as for a new build that can be reclaimed for eligible materials. The 5% rate only applies to labour or supply & fit. 

 

The downside for someone bringing a house that has been empty for over 2 years but not 10 years back into use is that there is no reclaim scheme so they either have to only use supply & fit arrangements @5% from VAT registered traders or pay 20% VAT themselves that can't be reclaimed if they are DIYing.

 

The reclaim scheme for eligible conversions is EXACTLY like the new build scheme other than for labour or supply & fit you are charged 5% VAT initially that you claim back when you do the reclaim. 

 

 

[scottishjohn]

yes i,m looking at one that was last occupied in 1965-has full walls but nothing else -

so this would be treated same as a new build then ,even if i did not flatten but rebuild  it ?

[newhome]

5 minutes ago, scottishjohn said:

yes i,m looking at one that was last occupied in 1965-has full walls but nothing else -

so this would be treated same as a new build then ,even if i did not flatten but rebuild  it ?

 

Yes, should be, but read the eligibility from for VAT431C.