VAT Ground workers

[Triassic]

I’ve had some grondwork done. The guy price inculds his time, a machine and a pecker. His invoice  includes VAT. Am I correct to assume I can reclaim the VAT when I submit my own novices to the VAT man at the end of the build?

[pulhamdown]

I don't think so.  When I built my house 5 years ago, all labour had to be either zero rated, or VAT free.  I only reclaimed VAT on maerials.

Edited April 1, 2018 by pulhamdown
typo

[Roundtuit]

No, not as I understand it, assuming we're talking about a straight forward self-build.  The work should be zero rated, and it's difficult to reclaim vat paid in error. I'd ask him to re submit without vat, and point him in the direction of the appropriate vat scheme documents if he queries it.

[Triassic]

It’s a self Build. His invoice does not separate out his actual time, his invoices say “excavating for foundations, 4t Digger for 10hours, plus, use of pecker per day”

[HerbJ]

No, HMRC will reject any invoice with labour. The work should have been issued with Zero VAT and you will have to go back to your contractor for the  VAT REFUND. It is not true that you cannot go back and obtain the wrongly charged VAT. HMRC informed me that it is illegal to incorrectly charge VAT and it's possible to take the contrcactor to the small claims curt to recover wrongly charge VAT.....

 

We had two invoices rejected because they included clearly included labour but HMRC  gave us clear wording to use when going back to the contractor for the VAT  refund. The following gives the form of words we used to one of the contractors.

I am in the process of reclaiming the VAT back for the Chandelier (under the DIY scheme - VAT431) - but HMRC has rejected your paperwork because ...

‘These invoices are invalid as the goods/services have been supplied and fitted or services have been provided in the course of construction of a new qualifying dwelling and no VAT should have been charged. Your supplier must correct the error. If the supplier still has any queries regarding the liability of their services or want to know what to do to make the necessary adjustment, they should contact the National Advice Service on 0300 200 3700. Ref: VAT431 NB Notes, Section 2 – VAT wrongly charged’
Please can I request that you review and amend these invoices to be zero rated for VAT – and refund the VAT that we’ve been charged on these invoices (£1064.60).

To support this change I supply
-    The Certificate for zero-rated Building Works
-    The Completion Certificate

If needed, I can supply the full letter from HMRC.

 

 

Edited April 1, 2018 by HerbJ

[nod]

28 minutes ago, Triassic said:

I’ve had some grondwork done. The guy price inculds his time, a machine and a pecker. His invoice  includes VAT. Am I correct to assume I can reclaim the VAT when I submit my own novices to the VAT man at the end of the build?

His labour should be zero rated on new residential work

The plant you can’t claim the vat back

He can So doesn’t need to charge you

 

[newhome]

I found asking trades to not add vat to labour invoices incredibly difficult in many cases even when quoting from the legislation. I felt that several of them thought I was some sort of tax avoider! I ended up not employing one of our favoured contractors because of his refusal to zero rate. I just don’t think he’d had any experience of self builders before, or at least not one who was asking for vat to be removed. 

 

One contractor who supplied and laid the screed sent in an invoice with vat despite being told that we did not expect to see vat added. I sent off a cheque for the excluding vat amount along with a note of the legislation and never heard anything further so assume he sorted it out! 

 

Edited April 1, 2018 by newhome

[HerbJ]

We had the same problem with the two contractors/suppliers that we had invoice rejected by HMRC.  They both complied very quickly on receiving our request for the VAT refund with  a new Zero rated invoice. With one, he flapped and fussed, said he had to check with his Accountant etc and needed a bit of pushing but a couple of weeks later we received a new Zero Rated  invoice and a cheque for the incorrectly charged VAT. The other company was a larger company and they just responded quickly with the new invoice and a cheque.

 

As I was told by HMRC, contractors charging VAT " in the course of construction of a new qualifying dwelling"  are acting illegally in charging the incorrect rate of VAT but if push comes to shove, the only final solution is to take them to court if all else fails. HMRC will not intervene and assist but they did give me the ammunition to fire....

Edited April 1, 2018 by HerbJ

[nod]

2 hours ago, newhome said:

I found asking trades to not add vat to labour invoices incredibly difficult in many cases even when quoting from the legislation. I felt that several of them thought I was some sort of tax avoider! I ended up not employing one of our favoured contractors because of his refusal to zero rate. I just don’t think he’d had any experience of self builders before, or at least not one who was asking for vat to be removed. 

 

One contractor who supplied and laid the screed sent in an invoice with vat despite being told that we did not expect to see vat added. I sent off a cheque for the excluding vat amount along with a note of the legislation and never heard anything further so assume he sorted it out! 

 

I’ve been vat registered for I’ve thirty years and also couldn’t understand why quotes were coming In plus vat 

The gas supplier had to ask accounts if they were able to zero rate But eventually did

Electric was the same Till I told them that the gas had no problem zero rating

I think it’s just laziness on the part of some company’s 

 

[Thedreamer]

Ask him to amend the invoice. You won't get the VAT back at the end.

 

Generally if you hire plant without a labour/operator it's standard rated (and no claim at the end)

 

If you hire plant with labour/operator should be zero rated for a new build.

[newhome]

6 minutes ago, Thedreamer said:

Ask him to amend the invoice. You won't get the VAT back at the end.

 

Generally if you hire plant without a labour/operator it's standard rated (and no claim at the end)

 

If you hire plant with labour/operator should be zero rated for a new build.

 

Worst case, do what I did and pay him the excl vat amount and argue the point later. He’s wrong, you do not need to pay the vat so paying the excl vat figure is entirely appropriate in my view and forces him to address. 

[Triassic]

I’ve sent the invoice back, with a request for it to be reisssued at zero vat.

 

Thanks for the help.

[lizzie]

I paid vat in error on our render. I was being pressed for final balance payment pretty much before it was dry.  I had lots going on and just paid. When I looked a week or so later realised I had paid vat and I should not have done.  I asked for the vat back and a new invoice. They initially refused. Referred me to HMRC website quoted all sorts at me. I rang the vat helpline they said i should not have been charged and and to ask for it back. I explained I was being refused and she said going to court was my only option it was wrong but HMRC would not intervene.  She pointed me at the vat exemption ceritifcate on the website and said try that on them.  I did and eventually I got the vat back......5 months later I have still not had any warranty documents from Alumasc for this install. Alumasc told me the installer only put the paperwork in a couple of months ago....maybe I upset the cash flow who knows but I have very expensive render still waiting its warranty checks and an installer who refuses to respond to my e-mails chasing it. Very poor customer service from this company.

 

That exemption cert is a useful doc.  If anything that should not have vat on comes with a vat inclusive invoice I pay ex vat and send a certificate. Once bitten and all that!

 

Having said that I have over £2000 of reciepts for materials in bought  in other peoples name, I didnt realise they were buying stuff on their account and so receipts in their name, vat lost to me I think but I will try and see what hmrc say when the time comes

[Temp]

It's all in Vat Notice 708. This tells trades what they should/shouldn't charge you VAT on.

 

If he provides materials and labor they should zero rat both to you even if he paid vat on the materials himself. He should reclaim that when he does his vat return. Might help convince him if you give him a letter stating this work is in connection with a new dwelling and put the address and planning reference on it.

 

Any problem and we can find the relevant section in Vat 708 to quote to him.

[Plumbersmateuk]

On 01/04/2018 at 16:20, lizzie said:

Having said that I have over £2000 of reciepts for materials in bought  in other peoples name, I didnt realise they were buying stuff on their account and so receipts in their name, vat lost to me I think but I will try and see what hmrc say when the time comes

There is a thread on here where somebody did the same and got their refund