VAT on Concrete/screed

[Ian Phillips]

Just a quick question,

 

Is concrete or screed VAT free from source i.e the supplier. Or is it charged up front and then reclaimed with the other materials at the end?

 

Have people had problems claiming back at the end?

 

Cheers

Ian

 

 

[PeterW]

Charged up front as it is a material unless you hire a pump company to place it for you and they contract the concrete supply as part of the service. 
 

If your builder provides it as part of the build package then he should zero rate it as part of his invoices to you. 

[newhome]

As Peter says, and if you are charged standard rate VAT ensure that the invoice only notes the materials and delivery. The minute it mentions any source of service / labour eg pumping, that turns it into a supply and fit arrangement that needs to be zero rated by the supplier. 
 

[Ian Phillips]

Thanks for the replies.

[shuff27]

Just to revive this thread - today I had foundation concrete poured.  The supplier refused to accept that it should be zero rated for VAT, even though I had pointed this out last week when I paid their pro forma invoice.

 

The guy operating their boom pump was the company owner as most of his employees were already on holiday.  I felt I had to pay what they asked, including the VAT, as this was their last day before a 2 week closedown & obviously I didn't want to leave the foundations open for 2 weeks, plus the likelihood of concrete price increase in the new year.

 

Can anyone advise my best course of action if they refuse to zero rate & refund the VAT I've had to pay?  Should I notify HMRC?

[shuff27]

I have video evidence of the supplier operating the pump as I thought building control might want to see it as part of their remote inspection - they're all on holiday too!

Edited December 21, 2021 by shuff27
spelling

[Temp]

VAT708 isn't an easy read but para 2.2 says..

 

Quote

Builders charge VAT on ‘building materials’ that they supply and incorporate in a building (or its site) at the same rate as for their work. Therefore, if their work is zero-rated or reduced-rated, then so are the ‘building materials’.

 

So an Electrician or Plumber doing "supply and fit" should zero rate both labour and materials.

 

In your case a lot depends on the invoice..

 

1) If its just for screed then it should include VAT as that's materials and you can reclaim it.

2) If it covers screed, pump and operator then the whole lot should be zero rated to you. As per para 2.2.

3) if two invoices (screed, pump & labour) then screed would be inc VAT. Pump and labour zero rated.

4) If three invoices (Screed, Pump hire and labour). The one for screed shoud include VAT which you reclaim. The labour should be zero rated. Pump hire should be standard rated and not reclaimable. 

 

Edited December 21, 2021 by Temp

[Temp]

2 hours ago, shuff27 said:

Can anyone advise my best course of action if they refuse to zero rate & refund the VAT I've had to pay?  Should I notify HMRC?

 

You will have to persuade them. Perhaps issue them a "certificate" as mentioned in VAT 708. HMRC don't require one but it sometimes help convince trades.

[Drew1000]

I would ask him to check with his accountant who will (should) confirm that it should be zero rated and if he does get him to invoice you correctly and refund the vat to you.  HRMC will not refund what they class as your mistake.

[HerbJ]

Also look at the excellent pinned "A guide to the VAT Reclaim Process". This post covers your issue some detail.

 

[Happy Valley]

We had the same conversation with our concrete provider - 2 slabs and 3 ICF pours. They consulted their accountant who agreed it should be zero rated for VAT as the pump was used on all of the deliveries. 

[shuff27]

Thanks for all the replies.  I've emailed the supplier & referred them to the relevant sections of VAT notice 708, along with a copy of my planning permission.  They're now closed till 5th Jan.

 

Concrete (£3360) & boom pump hire (£475) are on the same invoice - so if I don't get any joy from the supplier can I still claim back the VAT on the concrete & would just have to take the £95 VAT hit on the pump?

 

BTW the concrete price was £105 per cubic metre - best I could get from phoning every local supplier.

[HerbJ]

1 hour ago, shuff27 said:

so if I don't get any joy from the supplier can I still claim back the VAT on the concrete & would just have to take the £95 VAT hit on the pump?

 Already answered above

On 24/03/2021 at 13:40, newhome said:

As Peter says, and if you are charged standard rate VAT ensure that the invoice only notes the materials and delivery. The minute it mentions any source of service / labour eg pumping, that turns it into a supply and fit arrangement that needs to be zero rated by the supplier. 
 

 

HMRC will reject the entire invoice.  Just as they did with me. Read the thread above carefully and understand. It details all the appropriate information you need, including the standard rejection language from HMRC and  language you can use in your response to the contractor

 

Your best approach might have been,  if the contractor still resists 0% rating,  was NOT to pay the VAT  but  just pay the base invoice, with a letter based on the format included in the thread, together with the appropriately completed Pro-Forma Certificate  and requesting a revised 0% rated invoice.   

 

If they refuse to refund the VAT,  the VAT , then your only way to recover it would be through the courts and this will be further hassle and delay!

 

When I talked to HMRC (back in 2017) following the rejection of  couple of invoice that included 20% VAT, they clearly  advised that it is "illegal" to charge incorrect VAT on services.  As I remember it, when I asked what I steps I could  take to recover any incorrectly charged VAT, if the contractor still refused to refund the incorrectly charged VAT, I was clearly advised my only recourse was to sue the contractor on the basis that the VAT had been illegally charged (in accordance with the relevant legislation).

 

Thankfully,  I never got to this stage and my letters yielded the VAT refund and revised invoices.  

 

Best of luck

 

 

Edited December 22, 2021 by HerbJ
changed wording

[HerbJ]

Apologies- just realised that you have already paid the full invoice, including the VAT.  I have edited my earler post to reflect this. 

[saveasteading]

For clarity I think it is zero rated on new-build and 5% (reclaimable) on conversions, renovations and change of use.

 

Also that if you don't tell the builder that this will be reduced rate, then it would not be fair to then insist on the zero rating as it is a big hit on their cash-flow and risk.

 

You might argue that a concrete pump supplied by the supplier is part of the delivery, instead of the chute attached to the lorry. 

But I don't think I would try it with HMRC, unless the invoice simply showed supply of concrete.

[Roundtuit]

Personally, as there is an element of labour involved, I think it could all be zero rated; materials, plus pump and operator.   As above, ask them to have a chat with their accountant to reassure them that is correct, as you wouldn't want them to accidentally charge you VAT illegally.  To be safe, when they send the amended invoice, maybe ask them to word it as something like 'supply and install'...

[Temp]

Another thread on this here..

 

 

[Temp]

https://www.ecomerchant.co.uk/news/vat-reclaim-its-your-money/

 

Services provided by VAT registered contractors

• Contractor’s work on new build projects should be zero rated VAT
• Contractor’s work on conversions should be charged at the reduced 5% VAT rate.
• Contractor’s work on listed conversions should be zero rated VAT.

Plant Hire

• Whilst plant hire charges are excluded from the claim, where an operator is provided by a VAT registered contractor the charge should be in accordance with the rules for service providers (See point above), this may result in lower final cost.