Reclaiming VAT for barn conversion with 431C form

[Sam G]

Hi everyone,

 

We bought a derelict agricultural barn that had class Q permission for conversion into a residential building. We then applied for full planning permission for a more substantial conversion and this has been approved by the council, however we do not have permitted development rights.

 

I understand that our builder should be able to charge VAT at the reduced 5% rate (https://www.gov.uk/guidance/buildings-and-construction-vat-notice-708#section7)

 

I have also read that it is possible to subsequently claim back this 5% via the DIY housebuilder scheme with form 431C:

 

https://www.gov.uk/guidance/claim-a-vat-refund-for-a-conversion-if-youre-a-diy-housebuilder

 

The online service looks fine, however when I look at the actual form (https://assets.publishing.service.gov.uk/media/65858882ed3c34000d3bfde3/VAT431C.pdf), Question 7 says 'Do you have planning permission which includes permitted development rights?'. Next to this it says 'If ‘No’, you are not eligible to claim a refund under this scheme. You may need to seek advice on your completion certificate or evidence of habitation from your local authority as you must obtain and supply these documents to us in order to be able to claim a VAT refund under this scheme'

 

So am I right to think that we cannot claim back VAT with form 431C? Because although we have full planning permission this does not come with permitted development rights. This is the relevant part our planning approval:

 

Notwithstanding any details approved in writing by the Local Planning Authority associated with the conditions of this approval, upon completion, no further development, whether permitted by Classes A, B, C, D, E, F, G and H of Part 1 of Schedule 2 and Class A of Part 2, Schedule 2 to the Town and Country Planning (General Permitted Development) (England) Order 2015 (as amended) (or any order revoking and re-enacting that Order) or not, shall be carried out.

 

I would be so grateful if anyone has any advice on this, the 5% could make all the difference to us because the latest cost estimates from the architect have now gone over our budget.

 

thank you,

 

Sam

 

[IanR]

It's a badly worded question. I converted under Class Q, which excludes any further PD after conversion and reclaimed the 5% at the end of the build + the 20% for the materials I purchased directly. I don't remember that question when I claimed (2017).

 

It maybe clearer with an added comma, ie. "Do you have planning permission*,* which includes permitted development rights?"

 

ie. Is some of the conversion you have completed been developed under PD (and therefore not shown on your planning permission documents). If so you may need to get the LPA to agree it was legal via a "certificate of lawful development".

[Sam G]

Thanks Ian that's really helpful!