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I am just starting out, preparing my build plan, not started any activity on site yet. And yes, I am aware of the CIL returns before I do start! Sorry if this is repeating the subject but I just searched this forum and couldn't find the answer. First I need to say I understand that all VAT spent on materials is reclaimable on completion of the build, so all that needs to be done here is to save receipts!

My question is around 'supply and fit' activity that can be zero-rated, such as paying a roofer who also supplies the materials, but that a 'self build certificate' is needed to show the supplier I am a proper self-builder so he can safely invoice me VAT-free. How do I get such a certificate? It sounds like it is worthwhile to have as it's a way of obtaining some VAT-free labour. Of course another way would be to employ non-VAT registered contractors.

Advice anyone?

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Technically there's no such thing as a "self build certificate", and one shouldn't really be needed, but some people have found that the rules aren't often understood, so there are versions of a self-build chit around that can be of use in keeping contractors happy.  We only had one that was funny about zero rating, and I gave him this:  VAT Exemption Certificate - blank.doc

 

 

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11 minutes ago, Oldsteel said:

How do I get such a certificate? It sounds like it is worthwhile to have as it's a way of obtaining some VAT-free labour. Of course another way would be to employ non-VAT registered contractors.

 

It's in VAT Notice 708 but you probably won't need one. Most trades will only want to see the planning permission. 

 

VAT Notice 708

 

There is a guide to the VAT reclaim process here but you won't be able to see it until you've made 10 posts and become a 'regular' member. 

 

 

 

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Posted (edited)
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 First I need to say I understand that all VAT spent on materials is reclaimable on completion of the build, so all that needs to be done here is to save receipts!

 

HMRC accept DIY store till receipts for low values but for larger ones you might need to ask for a proper VAT receipt. They can hand write you one with your address on it. Note it should be your address not your builders or anything like that. 

 

Quote

My question is around 'supply and fit' activity that can be zero-rated, such as paying a roofer who also supplies the materials

 

All Labor must be zero rated to you. If someone does supply and fit then both the labor and materials must be zero rated to you. If you pay VAT on labor in error you cannot reclaim it from HMRC.

 

Quote

but that a 'self build certificate' is needed to show the supplier I am a proper self-builder so he can safely invoice me VAT-free. How do I get such a certificate? It sounds like it is worthwhile to have as it's a way of obtaining some VAT-free labour. Of course another way would be to employ non-VAT registered contractors.


Advice anyone?

 

 

Not "some vat free labour". All labour on the house and some things "closely associated with" the construction of a new house should/must be zero rated to you. The exception is services - things like an architects services are standard rated and can't be reclaimed.

 

As @JSHarris said... You do not need to give anyone a certificate. However some inexperienced trades are nervous about zero rating to you. In the first instance refer them to VAT 708. If that fails it might help to convince them if you give them a certificate but that's just a letter detailing your name, address, plot address, planning reference number etc. You write it yourself using words something like "This is to confirm that the work done by Fred was carried out on a new dwelling at the following address, planning reference etc" 

 

Edit: Cross posted with @newhome

 

Edited by Temp
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As you say we’ve had this question before But it is relevant to all 

Id be wary of using contractors that are not vat registered unless you supply the materials 

If they are not vat registered they will inadvertently charge you vat as they will paid it on the materials themselves 

 

im vat registered and when I’m Plastering or tiling a housing site I zero rate the labour and include the vat on the material on a separate invoice 

I pay it in to HMRC The builder claims it back You can do exactly the same thing 

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Thanks all for your advice - this has answered all my questions! And of course as I read on other threads the original invoice for labour must be zero-rated, as these cannot form part of a reclaim. I will likely write out a 'certificate' like the one from JS Harris just in case!

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On 06/08/2019 at 19:06, JSHarris said:

Technically there's no such thing as a "self build certificate", and one shouldn't really be needed, but some people have found that the rules aren't often understood, so there are versions of a self-build chit around that can be of use in keeping contractors happy.  We only had one that was funny about zero rating, and I gave him this:  VAT Exemption Certificate - blank.doc

 

 

Like clockwork, everytime. I need something. I ask the people Involved- no clue. I call HMRC, pointless. I google, pointless - i search the forum - success after 30 sec. I think i should just stop using any other source of information/advice . Waste of time

😁

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12 minutes ago, Patrick said:

I think i should just stop using any other source of information/advice . Waste of time

 

It’s still caveat emptor on here of course and the official answer can only come from HMRC (if only they could provide it ....!). 

 

 

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Most of our contractors just wanted to have a copy of our PP (which clearly said 'demolish & new build' - these are the qualifying conditions for the scheme) before they'd remove VAT from a supply & fit quote. A few needed redirection to VAT 708 first.

 

No doubt it goes in a file somewhere to be presented to the VAT inspector should they have a query at their end.

 

Now, given you're right at the start of the build, you can start as you mean to go on. While professional services and desk / walkover surveys cannot be zero rated, any elements of demolition, ground investigation that use tools / disturb the ground etc should be zero rated so make sure you get this established at point of quote.

 

Equipment hire (crane, scaff etc) is standard rate but the labour to operate / erect it is zero - you will need to get the supplier to split this out.

 

Some smaller contractors / vendors (e.g. eBay) are not VAT registered.

 

New utility connections are zero rated, moves are not (i.e. if you're demolishing an existing with electric & gas)

 

If a trade does ask you to order something (to help their cash flow) make sure it's in your name and has your site address on VAT invoice - worth opening a few accounts (non credit) at the local BMs to allow for this. I found they would often give you the trade's discount if you walked in with them to order (or they phoned it in on your account).

 

Get into a good filing habit now or face tackling the Shoe Box Of Doom at the end of your build :)

 

Also, unless you're doing loads yourself, accept that the VAT reclaim is fairly modest compared with the overall outlay during the build as most of your materials should be zero rated at source - it is welcome though!

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23 minutes ago, Bitpipe said:

Get into a good filing habit now or face tackling the Shoe Box Of Doom at the end of your build :)

 

That’s clearly still etched into your brain 😀 

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40 minutes ago, Bitpipe said:

Equipment hire (crane, scaff etc) is standard rate but the labour to operate / erect it is zero - you will need to get the supplier to split this out.

 

If you hire a crane or digger or whatever with driver to operate it then the whole lot is zero rated, not just the driver's labour.

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All good advice, and the blog on the topic is great. I think its all sunk in now. I haven't started the build yet (CIL notice not sent!) so have been assuming everything up to this point is a 'service' such as Architect fees, SE drawings etc. As soon as the build starts - well, ground clearance is the first task - the VAT rules will kick in. I agree the 'certificate' will be useful, per @Bitpipe if I were the contractor having the cert would give me a warm fuzzy feeling I wouldn't draw questions from the VATman. I work in compliance, and if it ain't written down -  it never happened 😉

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Just now, Oldsteel said:

All good advice, and the blog on the topic is great. I think its all sunk in now. I haven't started the build yet (CIL notice not sent!) so have been assuming everything up to this point is a 'service' such as Architect fees, SE drawings etc. As soon as the build starts - well, ground clearance is the first task - the VAT rules will kick in. I agree the 'certificate' will be useful, per @Bitpipe if I were the contractor having the cert would give me a warm fuzzy feeling I wouldn't draw questions from the VATman. I work in compliance, and if it ain't written down -  it never happened 😉

 

Fair enough - PP is an official letter issued by the LA and that's what all our contractors asked for - it has to say demolish and build as those are the scheme rules.

 

Not sure what the VAT inspector would make of a DIY certificate if they were audited - pretty sure they'd want to see the original PP letter. 

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