Zero Rating after VAT Reclaim

[AliG]

My parents have a couple of pieces of work to be done on their house.

 

They do not yet have a completion certificate issued, but did have their VAT claim paid a few weeks ago based on the house being registered for Council Tax.

 

The remaining work is-

 

1. Electrics for the recently installed carport.

 

2. Replacement of wood cladding that was water damaged during building.

 

The builder for some reason seems very confused about the VAT rules. He told the electrician not to Zero rate the work as they had moved in so the house and so it must have a habitation certificate.

 

We have agreed that we will pay for replacement wood if he installs it as it was not his fault it was water damaged, but he shouldn't have installed the damaged wood.

 

He has told the architect that he needs to charge VAT on the wood, even though his zero rated contract is not complete.

 

In normal circumstances I would be happy that this should all be zero rated as we do not have a completion certificate yet, but was wondering what the position was after your VAT claim has been paid?

 

This would impact the carport electrics, but I don't see how we should be charged VAT for wood to replace wood already installed and zero rated under the original building contract.

 

Any thoughts?

[saveasteading]

The builder can't zero rate at will. As your zero rate period seems to be completed, I reckon he is obliged to charge 20%.

[Temp]

+1

 

The VAT reclaim process required you to provide evidence of practical completion and you used your council tax info for that. So you've told HMRC it's complete as far as they are concerned. After completion everything has to be standard rated. 

 

 

 

[Temp]

1 hour ago, AliG said:

2. Replacement of wood cladding that was water damaged during building.

 

Not sure if this helps or clarifies...

 

 

https://www.gov.uk/guidance/buildings-and-construction-vat-notice-708#:~:text=Snagging (or the correction of,part of that building contract.

 

Quote

 

3.3.3 Snagging

Snagging (or the correction of faults) is often carried out after the building has been ‘completed’. The work forms part of a zero-rated building contract, provided you carried out the initial building work and the snagging forms part of that building contract.

 

If you’re carrying out the work as a separate supply (you may, for example, be contracted to correct faults where the original work was carried out by another person) and it is performed after the building has been completed, then the work is to an existing building and cannot be zero-rated under the rules in this section.

 

 

[ProDave]

In Scotland, you can use a certificate of temporary habitation as your "proof of completion" for your VAT claim.

 

If you do that before you have your actual completion certificate then there is no reason why the rest of the work done as supply and fit cannot be zero rated, right up to the very last piece of work the day before completion.

 

Why would you even tell your builder that you have submitted your VAT claim for the materials that you bought?  It is none of his business.

[AliG]

We hadn't told him, he just made the assumption that having moved in stuff could no longer be zero rated.

 

He knew absolutely nothing about how it worked. He originally wanted the form saying that the building was zero rated which is not for residential properties.

 

I can pass on the info re snagging, which is what I thought would be the case. Thanks @Temp