vat on new self build and ground works

[lorna-luxe]

On 15/01/2023 at 23:21, Valentina said:

Hello, 

I have found this forum today and I hope someone can give me some good news.

My partner and I are building our house where we would be living once finished. We have bought a land with planning permission and we are getting close to completion so i have started to put all the paper together for the VAT claim.

Today I read that construction services and ground works if related to the build should be zero rated, however our contractors have billed us 20% standard rate and we could potentially be 9,000 gbp out of pocket.

Below the services we have paid:

1) ground works for a sewage pipe redirection. Basically under the land there was a sewage pipe coming from a near development. One of the main condition of the planning application was that before starting to work on the land, we would redirect the sewage pipe to the adjacent bridle path. We submitted drawing to Southern Water, got the approval and redirected the pipe. The contractor charged us 20% vat, was the bill supposed to be "zero rated"? If so, the invoice is dated February 2022, can we do anything to recover this vat? Is the contractor liable for this and should correct this error provided it is an error?

2) Footing as per drawing. The same contractor charged us 20% standard rate for the service and the material (ie. concrete and Grab lorry to remove soil). Was it supposed to be "zero rated"? If so the invoices are dated March/April/May 2022, do you think we could recover the vat?

3) Construction service. My Partner bought all the building material himself, and we will claim back the VAT via HMRC. The contractor who build the house (brick work) charged us vat 20%. I read on the HMRC that building services should be zero rated, can you please just give me the confirmation? The builders finished their job in October so i hope i can still ask them to correct their invoices and refund us the VAT paid.

 

I am gutted that i have started to look at all documentation only now, but i would have expect that the contractors that do this for living know better then us. 

We are still at least 4 months from completion so my vat claim would be after that, also can you please confirm that i can claim for the vat paid in different years? ie 2022 and 2023?

 

So sorry for writing such a long message. 

I hope someone can help us to clarify and hopefully we can recover some money.

 

thank you very much.

Valentina

hiiii.....A lot of services, like groundwork and building, should be zero-rated for a new build. You may be able to get the VAT back if you ask your contractors to change the bills. If filed within 3 months of finishing, claims for 2022–2023 are fine. Relax, you're on the right track!!!!

[lorna-luxe]

On 16/01/2023 at 00:01, nod said:

As above You shouldn’t be charged vat on a new build 

But you can claim it back at the end As long as the company is vat registered 

Some companies insist on charging the vat Especially the smaller ones 

You have two choices To use them or not 

Unfortunately they will have already paid the vat in 

But all is not lost You can claim this back with your vat claim at the end 

hiiiii.... You shouldn't have to pay VAT on a new build, but if you do and the company is VAT registered, you can get it back at the end. Some companies, usually smaller ones, nonetheless want to add VAT because they had paid it. You can choose whether or not to utilize them, knowing that you can get the VAT back in your final claim.

[nod]

6 minutes ago, lorna-luxe said:

hiiiii.... You shouldn't have to pay VAT on a new build, but if you do and the company is VAT registered, you can get it back at the end. Some companies, usually smaller ones, nonetheless want to add VAT because they had paid it. You can choose whether or not to utilize them, knowing that you can get the VAT back in your final claim.

Yes there shouldn’t be any vat on a new build But some small companies won’t budge 

and the HMRC will ask you to claim it back off them If they spot it 

[Temp]

5 hours ago, lorna-luxe said:

hiiiii.... You shouldn't have to pay VAT on a new build, but if you do and the company is VAT registered, you can get it back at the end. Some companies, usually smaller ones, nonetheless want to add VAT because they had paid it. You can choose whether or not to utilize them, knowing that you can get the VAT back in your final claim.

 

Old thread alert.

 

You cannot reclaim VAT paid in error to a contractor for labor. The contractor must zero rate it to you. If you get a quote for labor that includes VAT its best to get this corrected before accepting it.

 

If they are reluctant then you can show them the relevant pages of the guide.

 

If its still a problem you can try issuing them a certificate.