New Build VAT Reclaim for Installation and Commissioning Services

[jack]

I think I know the answer to this, but thought I'd check.

 

We're going to have our ASHP installation finalised and commissioned by a professional. I've just received a quote, which includes VAT. 

 

I can't see why this would be any different to the installation and commissioning of, eg, windows or electric circuits as part of a new build. In that case, VAT shouldn't be payable. Does that sound right?

 

Thanks

[MikeSharp01]

My reading, and only cursory - so could be way out, is that they choose depending on the ratio of stuff to sevices. The predominant rate for the bigger proportion applies so if it is mainly sevices then VAT is charged if mainly stuff then not. You can claim it back anyway if it is charged providing you are within the window of time once the completion cert is issued. 

Edited January 29, 2018 by MikeSharp01
Typo

[Guest Alphonsox]

Sounds like a "supply and fit" arrangement so I wouldn't expect VAT to be payable - are the suppliers aware this is part of a new build ?

[ragg987]

They are installing and commissioning a permitted item which is permanent and integral to the build - so qualifies for zero VAT regardless of who supplies the equipment. Note that you CANNOT reclaim VAT for services as @MikeSharp01 suggests. If equipment is purchased separatley as part of a "materials-only" deal then you pay VAT and reclaim.

 

We went this route, I purchased direct (from BPC) and install was by my builder with no VAT charged.

[jack]

2 minutes ago, MikeSharp01 said:

My reading, and only cursory - so could be way out, is that they choose depending on the ratio of stuff to sevices. The predominant rate for the bigger proportion applies so if it is mainly sevices then VAT is charged if mainly stuff then not. You can claim it back anyway if it is charged providing you are within the window of time once the completion cert is issued. 

 

But an electrician can zero rate his/her services even if there's no supply at all. I think installation of zero rateable goods is zero rated, but design (or more particularly, design without supply) is not.

 

I also understand that you can't claim back wrongly charged VAT on services. The VAT refund is only on products.

 

3 minutes ago, Alphonsox said:

Sounds like a "supply and fit" arrangement so I wouldn't expect VAT to be payable - are the suppliers aware this is part of a new build ?

 

To clarify, it isn't supply and fit. The electrician and I did the physical installation. He did the electrical connections and the plumber plumbed most of it in.

 

What's being done here is finalisation of some installation details (temporary connections outside being made permanent, for example), filling of the UFH loops with glycol (supplied by me) and testing/commissioning in accordance with the manufacturer's standards. The only supply is some ancillary bits and pieces (a valve for a filling loop and some copper tubing).

[ragg987]

10 minutes ago, jack said:

I also understand that you can't claim back wrongly charged VAT on services. The VAT refund is only on products.

+1

 

11 minutes ago, jack said:

I think installation of zero rateable goods is zero rated, but design (or more particularly, design without supply) is not.

Installation on non-zero rated goods is not spelled out explicitly AFAIK. E.g. integrated dishwashers or microwaves.

 

Also, design can be zero rated if the design is provided as part of a permissible services and/or supply package. e.g. if your MVHR fitter also designed it or your MVHR supplier also designed it, then can charge a design fees against the rest of the package but can zero-rate it. The key here is that the design is not a stand-alone service.

 

This is an important difference, one area where a person can save on VAT for e.g. architect's fees is to procure the design, supply and fit together. Think turnkey timberframe companies.

 

In your case, I would say zero-VAT services.

[jack]

Great, thanks. That all accords with my understanding but I wanted some reassurance before going back to the ASHP guy and asking him not to charge VAT for his services.

[Temp]

+1

 

"Installation" should clearly be zero rated (no difference between the installation of an ASHP system, a wire or a brick).  

 

Then there is a question of the commissioning. Some services are standard rated but where someone is providing several things at different rates they should rate everything at the lowest rate. So the commissioning should be zero rated as well. Might be worth making sure that both installation and commissioning are same invoice.