Zero rated VAT

[Vijay]

I was under the impression that if a concrete pump company supplied the concrete, it should be zero rated? I managed to get a company to match the price I got for concrete but the guy reckons they have to charge VAT, he even asked his directors. How does the VAT aspect work for a supplier when dealing with self builders?

 

Cheers

 

Vijay

[Jeremy Harris]

I'm pretty sure that just pumping concrete into foundations is treated the same way as delivering it from a truck, so VAT is payable and then reclaimed at the end.  The exception might be for a specialist service, such as filling, vibrating etc something like ICF, where the supplier was doing more than just supplying concrete to the location required.

 

[Vijay]

Got no problem doing that, it was only from another post that someone suggested getting the pump company to supply the concrete in order to help cashflow and the VAT. So can I claim the VAT on the pump too?

[Jeremy Harris]

I'm pretty sure the pump should be zero rated, even if the concrete supply attracts VAT that can be reclaimed.  From what I can see, VAT Notice 708 isn't specific about something like this, which doesn't help.  What I found was that the VAT helpline was pretty good, it was only when you submit a claim that they change into petty bureaucrats...............

Edited May 9, 2017 by JSHarris

[Vijay]

I'll ask the pump people if they know it's zero rated. Would it be zero if they just did the pump and not supply the concrete though?

 

Do you have the VAT helpline number for self-builds?

[jamiehamy]

If the pump company supply the concrete at the same time as they pump it in,  then they are invoicing you for the service and materials - the VAT cannot later be claimed back. You can only claim for materials afterwards.

 

The pump company,  my spark and the groundwork contractor have all invoiced at zero including the materials. I'll need to have a dig but I looked into this in detail when we started to make sure we don't end up with the things we can't get the Vat back. I'll check again when I'm home. 

 

Btw the 'Helpline'  - bloody useless.  

 

 

[MikeSharp01]

I think its the normal VAT helpline but when I asked a question they just pulled up the VAT for new build guide and read me the portion I had told them I was not clear about. @JSHarris did not have the greatest experience with them. The safe thing is to get the pump cost included in the concrete delivery so the invoice reads just 'concrete' then there can be no question that the VAT is recoverable.

 

 

Edited May 9, 2017 by MikeSharp01
Crossed with @jamieHamy - says mostly the same thing

[Vijay]

Annoyingly the safest way of me getting the concrete on the day is to get separate companies for the concrete and the pump. The pump company can't guarantee they will get 75m3 of concrete to me in 4 hours, so want to charge for a full days pump.

[ryder72]

HMRC will give you a guideline and let you make your interpretation. Its only at the time of making the claim that you will find out (or not) whether they will entertain the refund. Its crazy.

 

You probably already know this, but hiring the pump on its own will not give you the opportunity to claim back the VAT. This will be classed as plant hire.

[jack]

36 minutes ago, ryder72 said:

You probably already know this, but hiring the pump on its own will not give you the opportunity to claim back the VAT. This will be classed as plant hire.

 

 

Is the way around this to characterise the situation on the invoice as paying a company to pump concrete?  You then aren't hiring anything - they are using their own plant to perform a building service as contracted.

 

[ryder72]

My understanding is that a single entity supplying and pumping the concrete will not incur the charge as they are provide the whole service.

 

I decided to let my builder supply cranes for lifting windows. It was a bit dearer but no VAT was charged and he handled the whole process.

[jack]

28 minutes ago, ryder72 said:

My understanding is that a single entity supplying and pumping the concrete will not incur the charge as they are provide the whole service.

 

The issue here, as I understand it, is that having the pumping company supply may not work.  The question is therefore whether it's possible to have the pump supplied separately and still zero rate it.

 

@Vijay, is there any reason the concrete company can't just hire the pump themselves (using the pump people you've spoken to) and roll up the cost into their invoice?

[ryder72]

1 hour ago, jack said:

 

The issue here, as I understand it, is that having the pumping company supply may not work.  The question is therefore whether it's possible to have the pump supplied separately and still zero rate it.

 

@Vijay, is there any reason the concrete company can't just hire the pump themselves (using the pump people you've spoken to) and roll up the cost into their invoice?

would it matter which way it worked - ie pump company supplying pump and concrete or concrete company hiring the pump and offering the same service?

[Temp]

If someone supplies two things (eg Labor and materials) that have different VAT rates then they should charge the lower VAT rate on both. So the first problem is to work out if different rates are applicable to the different elements in this case. 

 

If the invoice said "Pump rental and supply of concrete" then it should all be standard rated to you. It the pump rental was itemised on the bill then you can only reclaim for the concrete because VAT on tool hire cannot be reclaimed.

 

If the invoice said "Pour and level foundations (Concrete, pump & labor)" then that would be the supply of labor and materials incorporated into the building and I think it should be zero rated....

 

https://www.gov.uk/government/publications/vat-notice-708-buildings-and-construction/vat-notice-708-buildings-and-construction

11. Supplies of building materials by contractors

11.1 Goods supplied ‘over the counter’

If you are a retailer, a builder’s merchant, or supplying goods from stock, you must standard-rate most goods that you sell. Continues....

 11.2 Goods ‘incorporated’ by a builder

If you are a builder, the rate of VAT you charge for your work normally determines the rate of VAT you charge on any goods you ‘incorporate’ in the building (or its site) - see paragraph 13.3 - whilst carrying out that work. So, if your work is zero-rated or reduced-rated, then so are the goods. Continues..

 

 

 

 

 

[Temp]

More..

 

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)

 

[Temp]

So if they are providing a pump and operator that should be zero rated. If they are also supplying concrete then that should also be zero rated as their lowest rate is zero rated.

[jack]

9 minutes ago, ryder72 said:

would it matter which way it worked - ie pump company supplying pump and concrete or concrete company hiring the pump and offering the same service?

 

As long as what is supplied is properly expressed on the invoice, I suspect it doesn't matter.  What you don't want in either case is an item saying "hire of concrete pump".

 

We were advised (far too late, unfortunately) that a telehandler and operator for our window installation should have been zero-rated.

[ToughButterCup]

1 minute ago, Temp said:

So if they are providing a pump and operator that should be zero rated. If they are also supplying concrete then that should also be zero rated as their lowest rate is zero rated.

 

And that's exactly what happened on our recent pour(s)

[Vijay]

I'm going with separate concrete supplier and pump company as the all in one place couldn't guarantee getting all the concrete to me in 5 hours.

 

4 hours ago, Temp said:

More..

 

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)

 

 

where;s paragraph 13.1.2? can't find it on that link?

 

So the concrete will have VAT which I will claim back and the pump should be zero rated as it has an operator????

Edited May 10, 2017 by Vijay

[PeterW]

1 hour ago, Vijay said:

 

I'm going with separate concrete supplier and pump company as the all in one place couldn't guarantee getting all the concrete to me in 5 hours.

 

 

So what's the issue ...??? If they are contracted to pump 65 cubic metres as a single pour into the foundations then that is their issue ..?

 

 

[Vijay]

they wanted to charge me a full days pump in case they couldn't get the concrete to site in time!!!!

[jamiehamy]

@VijayIf someone says they can guarantee a volume of concrete in 5 hours,  they are lying! There are so so many variables involved that I simply can't see any guarantee being worth a hoot. Traffic,  breakdown,  delays at plant,  sickness etc etc... 

 

Can I ask why the 5 hour time gap? 

 

Sounds like the pump crew are being honest and upfront.  

[Ian]

15 hours ago, Vijay said:

Annoyingly the safest way of me getting the concrete on the day is to get separate companies for the concrete and the pump. The pump company can't guarantee they will get 75m3 of concrete to me in 4 hours, so want to charge for a full days pump.

They are understandably nervous as 75m3 in 4 hours would mean ensuring a full size 6m3 mixer delivery every 15 to 20 minutes of those 4 hours.

 

(About 20 years ago I was working as an in-house architect for a manufacturing company where I was responsible for a continuous pour floor slab for a new factory. It involved a 24 hour pour of concrete with a 6m3 delivery arriving on site and being laid every 15 mins of that 24 hours. It took a lot of organisation but was done that way to avoid daywork joints in the slab - all the movement joints were saw cut after the complete slab had been poured.)

[Temp]

6 hours ago, Vijay said:

I'm going with separate concrete supplier and pump company as the all in one place couldn't guarantee getting all the concrete to me in 5 hours.

 

where;s paragraph 13.1.2? can't find it on that link?

 

So the concrete will have VAT which I will claim back and the pump should be zero rated as it has an operator????

 

Yes.

 

"Concrete" is materials so will have VAT and can be reclaimed.

 

"Pump and operator" is tool hire (standard rated) and labor (zero rated). If both on same invoice they should both be charged at the lowest rate which zero rated.

 

It's not 13.1.2 it's 3.1.2. Try this link and scroll down a bit..

https://www.gov.uk/government/publications/vat-notice-708-buildings-and-construction/vat-notice-708-buildings-and-construction#zero-rating-the-construction-of-new-buildings

 

 

 

 

 

[Vijay]

20 hours ago, jamiehamy said:

@VijayIf someone says they can guarantee a volume of concrete in 5 hours,  they are lying! There are so so many variables involved that I simply can't see any guarantee being worth a hoot. Traffic,  breakdown,  delays at plant,  sickness etc etc... 

 

Can I ask why the 5 hour time gap? 

 

Sounds like the pump crew are being honest and upfront.  

The reason they said they couldn't guarantee it cos they have 4 lorries and the distance between the concrete factory and site was too far.

 

The other concrete supplier reckons it's no problems as they have enough lorries and would be getting the concrete nearer the site

 

The 5 hour time is their half day

Edited May 11, 2017 by Vijay