Claiming VAT on Materials Bought Prior to Planning Permission

[benben5555]

Hi,

 

We have bought our plot but are having a delay in submitting our planning. In the mean time we want to put up a new fence. If we buy the materials prior to receiving planning permission can we claim back the VAT at the end of the project or would it be rejected based on it being purchased prior to planning. Thanks

[Temp]

I think it could be rejected.

VAT708 Section 3.3.4 covers "Work closely connected to the construction of the building" but see section 3.3.5. For example demolition can be zero rated but is standard rated if carried out before you get planning permission..

 

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

 

Quote

 

3.3.6 Services carried out before or after the construction of the building

 

If you carry out services either before or after the physical construction of the building takes place, they can only be seen as closely connected if there’s a close connection between when they’re performed and when the physical construction of the building takes place.

 

Services described in paragraph 3.3.4 may be zero-rated (subject to the conditions in paragraph 3.1.2) where, for example:

 

* civil engineering services are supplied to a landowner for the purposes of servicing a building plot and it’s clear that the construction of a building that qualifies for the zero rate will take place shortly afterwards

 

* soft landscaping work is carried out after the building has been completed, where those works have been delayed due to adverse weather conditions

 

Services in paragraph 3.3.4 are standard-rated where, for example:

 

* site investigation or demolition work is carried out before planning permission for the construction of a building that qualifies for the zero rate has been granted.

 

* the services for a building (water, electricity) are installed on land which is to be sold as building land and where it’s not clear that the construction of a building that qualifies for the zero rate will take place shortly afterwards.

 

* the work is delayed until after the building is complete owing to an insufficiency of funds

 

 

HMRC don't always check everything very carefully so there might be people that have got away with it and others that haven't.

 

 

[Temp]

If the CIL is a thing in your area you shouldn't do any work on site until you have formally claimed the CIL exemption and got a response. You cannot do thus until after getting planning permission. It's not enough for the planners to just tell you it will be exempt.

[newhome]

On 20/04/2022 at 21:54, benben5555 said:

Hi,

 

We have bought our plot but are having a delay in submitting our planning. In the mean time we want to put up a new fence. If we buy the materials prior to receiving planning permission can we claim back the VAT at the end of the project or would it be rejected based on it being purchased prior to planning. Thanks

Strictly speaking it will be rejected but as @Temp says you may get lucky, you may not. Humans check the claims and can make errors.