Clever Tax planning or totally ilega

[Post and beam]

First of all, forgive me if this has been raised before.

 

As i understand it VAT on new builds is claimable for the supply of, roof tiles, as an example. But not on the labour to install them.

I guess you know where this is going...

If i got a roof tile supplier to charge me a premium for the supply of roof tiles and threw in free fitting have i just made a shrewd move or have i attempted to do something totally illegal?

By the way, i have no intention of doing anything illegal.

But if this is accepted practice then i would be stupid to miss out.

Thanks in advance

keith

 

[IanR]

VAT is claimable on materials and labour to install.

[Roundtuit]

Supply and fit should be zero rated.  Nothing dodgy there!

[JohnMo]

If they are installing and supplying they should not be charging you vat at all on anything.

[Post and beam]

Totally confused now guys

 

8 hours ago, IanR said:

VAT is claimable on materials and labour to install.

 

5 hours ago, JohnMo said:

If they are installing and supplying they should not be charging you vat at all on anything.

 

These 2 statements appear to be at odds. I fully accept that i might have been misinformed but now i am no better off. What am i missing?

[jack]

If someone just supplies materials, you have pay the VAT and claim it back once the house is complete and signed off.

 

Supply and fit, and most types of labour-only, must be zero rated at the time of supply. You can't claim back VAT on labour, so it's important you get it zero rated by the supplier when it's invoiced.

 

You can reclaim delivery charges for materials when you claim for the materials at the end.

 

You can't get VAT back on services (eg, surveys, architects) or hire (eg, scaffolding).

 

It can get a bit complicated: hire a digger, you pay the VAT on the hire and you can't reclaim. Hire a digger with operator on the same invoice, they should zero rate both the hire and operator. Hire a digger and pay someone separate on a day rate to drive it? Zero rate the operator, pay VAT on the hire and can't reclaim. 

 

I've heard it expressed as taking the lowest VAT rate of any component on the invoice, and applying that rate to everything else on the invoice, which is why it makes a difference whether the operator and digger are invoiced together.

 

I'm sure someone will be along to correct me!

[IanR]

2 hours ago, Post and beam said:

Totally confused now guys

 

 

 

These 2 statements appear to be at odds. I fully accept that i might have been misinformed but now i am no better off. What am i missing?

 

As @jack says, with a small bit to add.

 

For materials only, you pay 20% VAT and can reclaim it at the end of your build.

 

For Supply and fit, or labour only, it must be charged at the reduced rate, which is either 0% for a new build, or 5% for a Conversion or a residential refit on a property that's been empty for +10 years. The 5% paid can then be reclaimed at the end of the build.

 

Only VAT charged at the correct rate can be reclaimed.

[ToughButterCup]

19 hours ago, Post and beam said:

First of all, forgive me if this has been raised before.

...

 

The pinned post by @newhome on the VAT board is long. But comprehensive . Its well structured,  well written,  accurate. 

I found I had to make notes and summarise it for myself.  That process helped my understanding a great deal.

 

It also lead to reading judgments of VAT proceedings: while at this level precedent does not apply , I intend to submit a second application to reclaim VAT. Several people have made successful second claims. 

 

As SWMBO says, "Anything to keep you busy dear.... "

[Simplysimon]

and vat only zero if tradesman registered for vat, a few 1 man business still fly under the radar if they do a lot of cash in hand

[jack]

2 hours ago, Simplysimon said:

and vat only zero if tradesman registered for vat, a few 1 man business still fly under the radar if they do a lot of cash in hand

 

Good point.

 

My electrician didn't charge VAT because he was below the threshold. We bought stuff ourselves for him to install (under his guidance), and then claimed it back at the end.

[Andrew Jones]

On 29/04/2022 at 12:42, Post and beam said:

First of all, forgive me if this has been raised before.

 

As i understand it VAT on new builds is claimable for the supply of, roof tiles, as an example. But not on the labour to install them.

I guess you know where this is going...

If i got a roof tile supplier to charge me a premium for the supply of roof tiles and threw in free fitting have i just made a shrewd move or have i attempted to do something totally illegal?

By the way, i have no intention of doing anything illegal.

But if this is accepted practice then i would be stupid to miss out.

Thanks in advance

keith

 

If the roofing company are supplying the roof tiles and also fitting them, the whole contract should be VAT free - no VAT charged on the whole contract (project/job/task) .

[Post and beam]

Thanks so much guys.

 I am at the early stage of planning a build and for a budget of about £350k i am trying to understand the VAT reclaim amount. This has consequences, as the less it is the more i have to keep back for landscaping etc. And vice versa of course.

Fully appreciate that exactly how and what my build route is will have a big effect of the VAT.

Regards

keith

[joe90]

As an example my builder put the shell up and did not charge VAT on his labour or materials, however I did all the other work, bought the materials and claimed this back at the end ( and I used Andrew above to do my reclaim and he got back more than I thought so covered his modest fee 👍https://www.vat431.co.uk)

[Post and beam]

I have the booklet from Andrew Jones. Fully intend to use that service if and when we go ahead. Very glad to hear an endorsement.

[Temp]

6 hours ago, Post and beam said:

Thanks so much guys.

 I am at the early stage of planning a build and for a budget of about £350k i am trying to understand the VAT reclaim amount. This has consequences, as the less it is the more i have to keep back for landscaping etc. And vice versa of course.

Fully appreciate that exactly how and what my build route is will have a big effect of the VAT.

Regards

keith

 

Do you have planning permission yet? If not make sure to submit a landscaping plan showing trees and plants when you apply. Trees and plants aren't normally covered by the VAT reclaim scheme unless they are "required" by your planning permission. 

 

 

[Post and beam]

I dont, but family members have previously had detailed permission that lapsed on the same site.

There area  a couple of mature walnut trees that need to be retained but i have no plans to plant or install anything of note and i dont expect the planners will either. So i dont think this falls within what you are referring to.