Vat reclaim

[johns]

We have tried to reclaim vat on our self build, submitted all the paperwork and receipts but we have been refused. The problem being we had added a toilet and shower into a roof void space that was not on the original planning drawings, even though we made no alterations to the exterior of the build and building control approved it and signed it all off, we've been told by hmrc we have built unlawfully. Anyone else been refused like this?

[ToughButterCup]

18 minutes ago, johns said:

[...] told by hmrc we have built unlawfully. Anyone else been refused like this?

 

What evidence do they have that the build was unlawful? Or more precisely, what did they actually say when they told you that the build is unlawful? I ask because you might be able to claim for the new build stuff in the normal way - might you have accidentally claimed some refunding in error?

[Grosey]

Hmmm, I'm interested in this as I bought my plot with planning permission originally to include a jack and Jill bathroom, I decided to split this up in to 2 smaller en suites so i could potentially come in to the same issue as you when we get to the reclaim stage. 

[Jeremy Harris]

Seems odd, but may well just be something picked up in their initial paperwork scan. 

 

Our reclaim was rejected initially, because our approved plans show a bike store on the side of the garage.  It was only put on the plans because it was required in order to meet the Code for Sustainable Homes target, and that regulation was withdrawn between the time we submitted the plans and the date they were approved.  We never built the bike store, and HMRC refused to validate the claim until I provided photographic evidence, together with a note from the planning officer, that all was OK.

 

Once I did that, HMRC validated the claim and started processing it.

[johns]

57 minutes ago, recoveringacademic said:

 

What evidence do they have that the build was unlawful? Or more precisely, what did they actually say when they told you that the build is unlawful? I ask because you might be able to claim for the new build stuff in the normal way - might you have accidentally claimed some refunding in error?

 

When we submitted our claim we sketched on the plans where the toilet area was as we didn't want them to think we were claiming for additional items A condition of our planning approval was that we must build to the plans and any variation must be agreed in writing with the planning authority. This was only done verbally and the planners said internal works are not a planning issue 

[Temp]

Work on the inside of your house is covered by Permitted Development Rights (PDR) but I think you only get PDR when a house is complete.

 

If I'm correct then technically your house wasn't built "exactly as approved". The planners will take a pragmatic approach - they won't take enforcement action because it would be a waste of time and money.  They know you could have added the shower/toiler after completion under PDR.

 

The HMRC are being picky and unfair but they could well be legally correct. You should have completed the house "as approved" and then added the shower/WC.  As they see it the house was either built "not as approved" (eg unlawful) or you added the shower/toiler after completion (which isn't claimable).

 

I'm not sure of the way out of this one. You could try asking the planners to confirm that the house was "built as approved" but they might be reluctant to do that. If they aren't very co-operative you might have to try for a retrospective certificate of lawful development. You would get a certificate but I'm not sure if they would agree to it being retrospective. It depends when you get PDR. Depending on the outcome you would then resubmit the VAT reclaim or modify it to remove the shower/WC and resubmit it.

 

Beware the time limit! It might take too long to get a certificate.

 

Others should consider not claiming for anything that's not on the approved plans.

 

Edited April 3, 2017 by Temp

[Temp]

18 minutes ago, johns said:

A condition of our planning approval was that we must build to the plans and any variation must be agreed in writing with the planning authority.

 

That effectively means you don't have PDR until the house is complete.

[Barney12]

If the OP simply removes the items relating to the toilet and shower from the VAT claim then surely it becomes a valid claim?

 

If you wanted to be really pedantic you could simply disconnect all the items from the mains and say they are "stored in the room" ready for when completion has happened.

[Jeremy Harris]

6 minutes ago, Barney12 said:

If the OP simply removes the items relating to the toilet and shower from the VAT claim then surely it becomes a valid claim?

 

If you wanted to be really pedantic you could simply disconnect all the items from the mains and say they are "stored in the room" ready for when completion has happened.

 

Unfortunately it doesn't, as far as HMRC are concerned.  All they are really interested in is getting bits of paper that "prove" to them that everything is in order, and they will try very hard to refuse any and every claim they can if they can find a legitimate reason to do so.

 

In our case I had to get a note from the planning officer saying explicitly that the removal of the bike shed from the approved plans had been agreed, because all we'd had was a verbal confirmation that we were no longer required to build it in order to get the points needed under the, by then defunct, CfSH rules.  As soon as HMRC had a copy of the as-built amended plan (which was the one we'd sent out to tender) with the note from the planning officer to say that it was OK, they processed our claim.

[Barney12]

Hmmm interesting and thought provoking!

 

We had to apply separately for our solar panels on the main house as they were excluded (at the parks request) from our initial application. We were granted the permission (only last week!) and obviously before the house is built. BUT, the application stated (again at the parks request) "Instalation to an existing dwelling". 

 

From whats you've written I could likely fall foul of HMRC for the entire claim in the worse case.

 

Time to write to the National Park and get them to clarify my position me thinks!!

[Temp]

I checked the reclaim form and it says..

 

"Has Planning Permission been granted for your new build? To obtain a VAT refund you must provide evidence that the works are lawful and send us a copy of the planning permission"

 

So you might get away with a letter from the council stating "Planning Permission is not required for the additional shower/wc" and you reminding them that it was done prior to completion. However HMRC were really pedantic they could say that although PP isn't required _now_ it was when the house was completed. You would hope they would see sense.

[Temp]

1 minute ago, Barney12 said:

We had to apply separately for our solar panels on the main house as they were excluded (at the parks request) from our initial application. We were granted the permission (only last week!) and obviously before the house is built. BUT, the application stated (again at the parks request) "Instalation to an existing dwelling". 

 

I think at least try for some sort of wording that allows or better still mandates installation on the building before completion.

[Jeremy Harris]

The solar panels aren't very clearly shown on our approved plans, but as the supply and installation were zero rated by the company that fitted them, HMRC weren't involved.  I deliberately kept the plans that were submitted for PP as vague as I could reasonably get away with, really just to allow a bit of freedom to change minor details that weren't shown, not realising at the time that HMRC would pore over the approved plans with a fine tooth comb, looking for ways to refuse a claim!

[IanR]

Out of interest, how do HMRC find out that the actual build is not in line with planning? Are they asking for photos that then inadvertently show something that is not on the approved plans, or are they counting up toilet pans etc. on the receipts provided and working out too many have been claimed.

 

Edited to add:

Just reread and seen this comment.

Quote

When we submitted our claim we sketched on the plans where the toilet area was as we didn't want them to think we were claiming for additional items 

 

Thanks for advance warning...I won't be doing that.

Edited April 3, 2017 by IanR

[Bitpipe]

This is good to know and now I'm a bit worried.

 

Our basement was shown internally on the planning as an open box, but we made it into 4 rooms. Not sure if this will cause a problem with VAT reclaim, bot in general for the claim and the basement itself.

 

Most of the fit out work there was zero rated but I was still planning to claim VAT on the timber for partitioning it, doors, skirting & architrave.

 

We also put in glazed doors (which need VAT reclaim) between living room and study on the GF that is not in the planning drawings.

 

Given plans can change during a build, without needing recourse to the planning dept, how are these best presented to the HMRC?

[johns]

1 hour ago, Temp said:

I checked the reclaim form and it says..

 

"Has Planning Permission been granted for your new build? To obtain a VAT refund you must provide evidence that the works are lawful and send us a copy of the planning permission"

 

So you might get away with a letter from the council stating "Planning Permission is not required for the additional shower/wc" and you reminding them that it was done prior to completion. However HMRC were really pedantic they could say that although PP isn't required _now_ it was when the house was completed. You would hope they would see sense.

We did have a verbal conversation with the council to see if planning was required, they said only if we were to install windows, as this would have a variation to the exterior. I have contacted the council to see if they can send me approval in writing . The letter from HMRC is asking for a 'letter of confirmation' to these changes and they state they have not yet validated the invoices and sent me them back.- we have 30 days to send additional information As this area was only sketched on the plans as a proposal to validate the receipts for the additional items could we remove the receipts from the claim and re submit

[Temp]

2 hours ago, IanR said:

Out of interest, how do HMRC find out that the actual build is not in line with planning?

 

When the receipts are inconsistent with the drawings. eg you claim for 2 garage door when there is only one on the elevation drawings.

 

[Bitpipe]

1 hour ago, johns said:

We did have a verbal conversation with the council to see if planning was required, they said only if we were to install windows, as this would have a variation to the exterior. I have contacted the council to see if they can send me approval in writing . The letter from HMRC is asking for a 'letter of confirmation' to these changes and they state they have not yet validated the invoices and sent me them back.- we have 30 days to send additional information As this area was only sketched on the plans as a proposal to validate the receipts for the additional items could we remove the receipts from the claim and re submit

 

That's good to know, will try and get this for any variations in advance of submission as our LA are very slow to reply - 30 days is very tight.

 

[Temp]

1 hour ago, johns said:

We did have a verbal conversation with the council to see if planning was required, they said only if we were to install windows, as this would have a variation to the exterior. I have contacted the council to see if they can send me approval in writing . The letter from HMRC is asking for a 'letter of confirmation' to these changes and they state they have not yet validated the invoices and sent me them back.- we have 30 days to send additional information As this area was only sketched on the plans as a proposal to validate the receipts for the additional items could we remove the receipts from the claim and re submit

 

I would see what the council say. I doubt they will send you a formal grant of approval, most likely they will confirm that Planning Permission isn't required for the change and hopefully that will satisfy the HMRC. To get a formal grant you might have to submit an application for a non-material amendment with drawings and a £28 (?) fee. That can take some time to be processed. 

  

I'm not sure how the HMRC would respond to you removing the additional items. I think you would have to admit that it appears the additional shower/wc was not formally approved prior to completion and explain that you have deleted these from your claim.

 

Back in 2015 HMRC were turning the screw on DIY builders.. I realise the three cases here are different to yours but you get the idea...   

 

http://www.landmarkpt.com/blog/2015/11/16/hmrc-under-pressure-over-new-penalty-regime-for-diy-builders

 

 

[Jeremy Harris]

My experience was that HMRC accepted a note from the planning officer (my printout of an email) stating that the bike shed requirement had been removed before the plans were approved.  That plus a photo showing where the bike shed was supposed to be on the original plans, plus a copy of the as-built plans, satisfied them.  The annoying thing was that they sent the whole large pack of receipts etc back, so I had to re-post them all back to them.

[tillywiz]

Can anyone furnish me with how and where one gets the zero vat certificate and do we have to get it before work is started .part of the work is permitted development and also a very small extension .would a repacement floor for a room converted from a kitchen to a bedroom qualify for zero on materials

[PeterW]

5 minutes ago, tillywiz said:

Can anyone furnish me with how and where one gets the zero vat certificate and do we have to get it before work is started .part of the work is permitted development and also a very small extension .would a repacement floor for a room converted from a kitchen to a bedroom qualify for zero on materials

 

Hi 

 

VAT is not reclaimable on extensions - its only valid for new builds and certain conversions....

 

Saving money on VAT is only possible by using non-VAT registered trades and doing some real smart buying 

[warby]

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

[PeterW]

7 minutes ago, warby said:

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

 

Why is it nonsense ..??

 

For a small extension where VAT is not reclaimable, using a non-VAT registered contractor is an immediate 20% saving. 

 

On a larger development there are a number of other ways but in the context of the question asked this is an immediate and tangible benefit. 

[Jeremy Harris]

I agree, we used five different not-VAT registered people.  In our case there was no saving for the main build, because it was a new build and would have been zero rated anyway, but I've since used one of them for two landscaping jobs since we completed and the saving of 20% on the labour cost is definitely worth having.