Recommended Posts

Hi @newhome They send a letter with any queries/dedictioms and then you have a set amount of time to respond

  • Thanks 1

Share this post


Link to post
Share on other sites

HMRC do send a confirmation of receipt after they have checked the submission. They were very overloaded when we made our submission in March 2017 and had a huge backlog, so it will very likely take longer than stated on their form.

 

They do pay you on all approved items and deduct any disallowed items, giving a reason item by item for rejection. Their decision can be challenged. We made a prompt re-submission/challenge on 4 or 5 items ( requiring more detail on the supporting Invoice) and they were all subsequently approved.   There were another 2 items which we had to address with suppliers and we managed to recover the VAT from them using wording provided by HMRC ,as they had incorrectly charged us VAT. We accepted that we had incorrectly submitted 1 invoice and never resubmitted ( it was only £40 or so)

 

The re-submission took a lot longer  than the original submission, because the backlog had increased significantly in mid 2018

  • Thanks 1

Share this post


Link to post
Share on other sites

Confirmation of receipt arrived this morning :) along with some additional questions. Is there anything for me to be concerned about here? Essentially the original plot owner applied for planning permission for 2 houses to be built here. He built the first one and in view of the falling housing market at that time he sold the first house, split the plot in 2 and I bought the second plot as a self build project. The builder in question had no input to my house at all. 

 

As soon as the plot was purchased we contacted the council to let them know that we had bought the second plot. My husband dealt with the planning department and made some minor amendments to the fenstration but they didn’t require a new planning application for this minor amendment, and building control transferred the building warrant into his name (it covered both houses even though the first one was already built and being lived in and they said it would not be straightforward to split). We then built the second house from scratch. When my husband died the building warrant was put in my name and eventually I got it signed off with the completion certificate in my name. 

 

I don’t have any previous planning permission, just this one, although I understand that there was planning permission in 2003 for a totally different style of house but it was replaced with this one. And I assume I can just provide evidence of purchasing the plot as I’m not sure what they mean by building agreement / handover documents as we built it ourselves as is evidenced by all of the other information such as house plans and invoices already sent and in my name. 

 

EE738BA2-5027-4CCF-BD27-4ECD0DB2F493.jpeg

Share this post


Link to post
Share on other sites

 By way of an update I rang HMRC earlier. Over 20 minutes in a queue but a pretty helpful lady then explained that the questions I had been asked were standard practice where planning permission covered more than 1 property. She said that they had to understand whether the owner was going to build the first house,  live in it and make a VAT claim for house 1 whilst then building the second house and doing the same. I don’t know what action they take in those circumstances as I don’t own the other plot and someone was living in the other house before I purchased the plot so she was happy with that and just wanted proof of purchase for the plot. It doesn’t sound like anything I need to be concerned about anyway :)

 

Roll on the arrival of some money! 

 

 

 

 

 

 

  • Like 1

Share this post


Link to post
Share on other sites
26 minutes ago, newhome said:

She said that they had to understand whether the owner was going to build the first house,  live in it and make a VAT claim for house 1 whilst then building the second house and doing the same

 

Interesting evidence of how HMRC is drawing a distinction between one-off self builders and serial builders who make building their business. I perceive this as a trend.

Share this post


Link to post
Share on other sites
Just now, Dreadnaught said:

 

Interesting evidence of how HMRC is drawing a distinction between one-off self builders and serial builders who make building their business. I perceive this as a trend.

 

Yes she made a point of saying that she hoped I would be living in my house for many years, as in not putting another claim in shortly! She did also say that the serial approach wasn’t against the rules per se but they needed to understand intent. I got the impression that they were looking out for non tax payers making this a business too, just from the way she said ‘you and I are tax payers’. Might have read too much into that though and to be fair I was just happy that I wasn’t impacted! 

 

Share this post


Link to post
Share on other sites
Posted (edited)
10 minutes ago, newhome said:

She did also say that the serial approach wasn’t against the rules per se but they needed to understand intent.

 

Very interesting. I wonder what the word intent means for them.

Edited by Dreadnaught

Share this post


Link to post
Share on other sites
Posted (edited)
2 hours ago, newhome said:

She did also say that the serial approach wasn’t against the rules per se but they needed to understand intent.

 

Yes there is a distinction between the tax treatment of someone who builds their own houses to live in and someone who makes a living building houses. Normally your house is exempt from Capital Gains Tax, however if you are effectively making a living out of self building then they can charge you income tax on the capital gain. 

 

If you build one house and move in, then some time later build another house for a legitimate reason (perhaps you decided the first one was too small or you move jobs) that's allowed. However if you build two very similar houses one after the other on the same plot or close by it's much harder to argue that you had a genuine reason to move from one to the other and weren't moving in and out just to avoid a tax bill.

 

A classic mistake would be to ask the bank for a short term mortgage or business loan to build the first house knowing you planned to sell it and pay off the mortgage as soon as the second house was finished. HMRC could ask the bank for copies of any correspondence relating to the loan and find out you never planned/intended to live in the first one long term.

 

 

 

 

Edited by Temp
  • Like 2

Share this post


Link to post
Share on other sites

Thankfully none of that applies to me. I also don’t think I’d be very successful at self building houses for a living :)

 

 

  • Like 2

Share this post


Link to post
Share on other sites
11 hours ago, newhome said:

Thankfully none of that applies to me. I also don’t think I’d be very successful at self building houses for a living :)

 

 

Same here. :(

  • Like 1

Share this post


Link to post
Share on other sites
12 hours ago, newhome said:

Thankfully none of that applies to me. I also don’t think I’d be very successful at self building houses for a living :)

I just hope I'm successful at self building and living :o

  • Like 3

Share this post


Link to post
Share on other sites
3 hours ago, Plumbersmateuk said:

I just hope I'm successful at self building and living :o

 

I have made it through the other side and it’s all good :).  Well there are still a few things to do but ain’t that just life anyway? I don’t claim to have done everything perfectly, far from it, and hindsight is fantastic albeit mostly useless, and nor do I think the economics ever stacked up (which is why the original owner / builder sold us the plot in the first place). But do I feel some sense of satisfaction for having achieved this? Well yes, in a way. It’s quite unlike anything I have ever done before, and will possibly ever do again, but it’s here, and real. There have been the full range of emotions invested; excitement, joy, frustration, downright annoyance and sometimes worry. So do self builders do it for the dream, the challenge, the satisfaction, or something else? Cos it surely isn’t for the money ;)  

 

 

  • Like 2

Share this post


Link to post
Share on other sites
15 hours ago, newhome said:

There have been the full range of emotions invested; excitement, joy, frustration, downright annoyance and sometimes worry. So do self builders do it for the dream, the challenge, the satisfaction, or something else? Cos it surely isn’t for the money ;) 

Well I've experienced all those emotions and I've not even started on the foundations.

No definetly not the money.
It's so I have a house that fits and works around me primarily, and that I don't have neighbours, as in estates (some might say I'm a miserable old git but I'm not.....'onest).

I won't be building my dream as I don't have the funds and where my plot is located house prices are not very good.

Share this post


Link to post
Share on other sites

I still think you can build and make money - in the space of two builds (and a lot of stress) it’s got me way further up the property ladder than I would have achieved otherwise (unless I wanted a huge mortgage). Added to that was getting a house size and layout which I could tailor to our needs and I have to say it’s definitely been worth it. There were times in the build where the stress levels were high and I wondered if it was worth it,  but you need to see through these patches as it definitely is once your through it and can look back

Share this post


Link to post
Share on other sites
1 hour ago, Trw144 said:

I still think you can build and make money - in the space of two builds (and a lot of stress) it’s got me way further up the property ladder than I would have achieved

 

I guess it depends on where you buy, the type of plot and other factors. I haven’t lost money on my house and will probably get back my total outlay but I would have ‘made’ much more money sitting on the house I had in Kent before I moved to Scotland and watching it appreciate. I do agree that economics aside it allows you to get the house that suits your lifestyle as long as you hit the mark in the design phase. 

 

Share this post


Link to post
Share on other sites

Create an account or sign in to comment

You need to be a member in order to leave a comment

Create an account

Sign up for a new account in our community. It's easy!

Register a new account

Sign in

Already have an account? Sign in here.

Sign In Now