Self Build VAT Claim On Machinery Purchase

[Kerron Allen]

Hi All.

 

I am about to build my house and I am looking to purchase a tele handler. I know you cannot claim the VAT on hire but can you if you buy the machine?

 

Any advice is greatly appreciated.

[Jeremy Harris]

Welcome.

 

Unfortunately you cannot reclaim VAT on anything that doesn't get incorporated into the house, as a general rule of thumb, and this includes all tools, machinery, plant etc.

[Kerron Allen]

Thanks.

 

That has thrown me a bit! Not many VAT free machines out there. I guess I'll just have to take the hit!

[Jeremy Harris]

The VAT rules are a bit of a minefield, especially as there are so many apparent anomalies.  For example, anyone who provides a design, supply and install/manage service can zero rate the whole invoice, even though it contains elements that would normally attract VAT (the design part).  It also gets interesting when it comes to things like the kitchen, where you can reclaim the VAT on the units, work surfaces, sink, taps etc, but you can't reclaim the VAT on any fitted appliances.

 

Some of the other things you can't reclaim VAT on, or ask a supplier to zero rate, are scaffolding, skips, portaloo hire (or purchase), any professional fees (so architects, structural engineers etc) or even things like fees paid to local authorities for things like highway excavation or road closure permits. 

 

You can get architects or structural engineers fees zero rated if they are included as a package of work that involves supplying and building work, though.  For example, we had to pay VAT on the fees from the structural engineer that designed our retaining wall, but the fees for the structural engineer that signed off our foundation system and house frame were zero rated, as they were included in the construction contract.

 

 

 

 

[epsilonGreedy]

3 minutes ago, JSHarris said:

It also gets interesting when it comes to things like the kitchen, where you can reclaim the VAT on the units, work surfaces, sink, taps etc, but you can't reclaim the VAT on any fitted appliances.

 

 

Except an Aga cooker which only illustrates your point about complexity and that I was paying attention during an excellent Building Control presentation at the weekend Swindon Self Build show.

 

In the era of the Passiv House I doubt many fit Aga's but what about a central vacuum system?

[Jeremy Harris]

I think the Aga (and other combined cooker/heating/hot water devices) are classified as being primarily for heating/hot water, hence the reason for them being in the list of things that you can get VAT back on, or have zero rated if supplied and installed. 

 

Central vacuum systems aren't eligible for reclaim, or zero rating if supplied and installed, as they are classified as appliances.  It really is damned tricky determining if you can get the VAT back on something, or have it supplied and installed without VAT, as even the HMRC aren't always on the ball with what does or does not attract VAT.  A good example is our boiling water tap.  HMRC advised that I couldn't reclaim the VAT, then when I asked them how I was going to split out the VAT from the boiling water part of the kitchen tap (it's a single integrated hot/cold/boiling water tap) they then agreed that as it was integral with a tap that would normally be eligible for VAT reclaim, I could reclaim the VAT on the whole thing.

[pulhamdown]

10 minutes ago, epsilonGreedy said:

 

but what about a central vacuum system?

 

I reclaimed the VAT on mine.  You cant just unplug it like a cooker or fridge!

 

 

[epsilonGreedy]

3 minutes ago, pulhamdown said:

 

I reclaimed the VAT on mine.  You cant just unplug it like a cooker or fridge!

 

 

Interesting that your experience differs from @JSHarris

 

Like a global corporation, can I apply the concept of jurisdiction shopping to my self build VAT reclaim by submitting to a Scottish VAT office for my English property!

[Jeremy Harris]

Whether you can or cannot unplug it doesn't seem to matter.  For example, you can't reclaim the VAT on a fitted dishwasher, oven, hob, microwave, fridge, freezer or whatever, as despite being built-in to the kitchen units, HMRC still classify them as appliances.  I'm certain that central vacuum systems fall into the same category, and may even have a note somewhere about them, as we were initially planning to fit one, and I'm pretty sure it was one of the things I checked with the HMRC VAT helpline at the time.

[le-cerveau]

You can claim VAT on a build in vacuum cleaner, page 14 of the claim form VAT431NB:

• Goods (building materials) you can claim for
• dust extractors and filters (including build-in vacuum cleaners)

That is how most are sold due to the fact that they are VAT deductible, despite the fact you could buy several top of the range Dysons for the price!

Also if you have the vacuum unit in the recommended location (garage) as it is loud you have introduced a massive air and heat conduit into (out of) your house!

 

[Jeremy Harris]

7 minutes ago, le-cerveau said:

You can claim VAT on a build in vacuum cleaner, page 14 of the claim form VAT431NB:

• Goods (building materials) you can claim for
• dust extractors and filters (including build-in vacuum cleaners)

That is how most are sold due to the fact that they are VAT deductible, despite the fact you could buy several top of the range Dysons for the price!

Also if you have the vacuum unit in the recommended location (garage) as it is loud you have introduced a massive air and heat conduit into (out of) your house!

 

 

Thanks for that, I was clearly mistaken, but it was a fair time ago and I must have phoned the helpline half a dozen times to try and clarify what was and wasn't reclaimable!

 

FWIW, we decided to buy two cordless Dysons, one for upstairs, one for downstairs, as it was both a great deal cheaper than a built in vacuum and a heck of a lot less hassle to use.  We stayed in a holiday let with a built in vacuum and it was that which convinced us that they were a pain.  The long length of hose that you have to drag around is more hassle than the lead on an ordinary corded vacuum cleaner.  The only thing we liked about the built in system was the neat little plinth fitted "dustpan" slot in the kitchen, that you could flip open and just brush things into.

[le-cerveau]

9 minutes ago, JSHarris said:

but it was a fair time ago

I only know as I am currently completing my claim.  Have just received some new invoices that state Invoice, not pro-forma or order.

Just waiting the final completion certificate and I am good to go!

[lizzie]

Anyone claimed vat on their Bora hob...integrated extractor is the question mark much like the boiling water tap.

[Jeremy Harris]

6 minutes ago, lizzie said:

Anyone claimed vat on their Bora hob...integrated extractor is the question mark much like the boiling water tap.

 

Perhaps worth a call to the helpline and making note of what they say so that you can quote it with the reclaim. 

 

I suspect that they may allow it, based on my experience with the boiling water tap, as it seems the principle they apply is that if one element of an integrated gizmo is eligible, the whole of it becomes eligible.  The only issue may be if the hob has a recirculating extract or vents to outside, perhaps.  If externally vented then it probably counts as being a kitchen extractor, as required by building regs, and so eligible, if it's a recirculating unit then perhaps it isn't!

[newhome]

1 hour ago, epsilonGreedy said:

Except an Aga cooker

 

I believe that Agas have to be solid fuel or oil fired, or designed to heat space or water so the electric ones might be a struggle to get approved maybe, and a range cooker wouldn’t qualify I think. 

 

 

 

 

[lizzie]

@JSHarris recirculating as mvhr outlets nearby.  Will make a call, I am getting to the stage of thinking about getting evrything out of thr boxes to try and start organsing the vat reclaim docs so its timely.

[le-cerveau]

24 minutes ago, JSHarris said:

if it's a recirculating unit then perhaps it isn't!

My kitchen company (supply & Fit) supplied my extractors (recirculation units) VAT free without any second thoughts so the vent side should be covered, as @JSHarris says phone and try they can only say no and you are no worse off, other than waiting on the phone for probably close to an hour!

[newhome]

54 minutes ago, JSHarris said:

FWIW, we decided to buy two cordless Dysons, one for upstairs, one for downstairs, as it was both a great deal cheaper than a built in vacuum and a heck of a lot less hassle to use.  We stayed in a holiday let with a built in vacuum and it was that which convinced us that they were a pain.  The long length of hose that you have to drag around is more hassle than the lead on an ordinary corded vacuum cleaner. 

 

Yep! I have a built in vacuum but always use the cordless machines that cost a lot less as they are much more convenient. I never saw the point of a built in vac TBH but it was one of the things hubby wouldn’t compromise on, and I don’t think he used it once! I’ve never ever used it downstairs. The hose for downstairs is still in its box in the garage. Still, I might get the vat back with any luck! ?

 

The garage door rule is interesting as you are not allowed to claim for the electric motor but some doors like the one I have won’t work unless they have a motor. I haven’t been able to claim for the door anyway (no garage on the PP) but it would be a pain if you’ve bought it as a single unit and want to claim I imagine. 

 

You also can’t claim for blinds but mine are all integrated into the windows so I have been able to. 

 

The other interesting thing is when you buy a timber frame kit supply only it will include a certain amount of structural design time for the timber frame but I assume that HMRC doesn’t reduce the claim by a proportion. I say assume because I haven’t had any money from them yet so it’s a journey of discovery! 

 

 

 

[newhome]

34 minutes ago, le-cerveau said:

phone and try they can only say no and you are no worse off, other than waiting on the phone for probably close to an hour!

 

I rang them with a query and they were worse than useless TBH. Definitely wasn’t worth the wait time. And I believe that they agreed something on the phone with @HerbJ but then refused to allow it when the claim was submitted. They really are a law unto themselves, as well as a timeline unto themselves. 

Edited May 14, 2018 by newhome

[le-cerveau]

17 minutes ago, newhome said:

You also can’t claim for blinds but mine are all integrated into the windows so I have been able to.

Somewhere on one of the forms/websites it covers integrated blinds and that you can claim for them, we are the same, Internorm windows with build in blinds, supply and fitted so no vat paid anyway!

[Jeremy Harris]

We claimed for our electric roller door - I just provided some rough evidence (some printouts from two or three suppliers) that there were no 3m wide manually operated, insulated domestic garage doors available, and they didn't question it.

[newhome]

I wonder how many companies providing supply and fit services and thus zero rate the invoices fully understand all the rules? Thus is it easier to get something vat free that HMRC would otherwise reject if you get it supplied and fitted by a supplier? 

 

I would also suggest that everyone sends the full materials list for a timber frame kit with the initial claim as it appears that they ask for this anyway so don’t refund that initially. Back in 2009 when I first printed the claim instructions the materials list was one of the requirements but it wasn’t on the latest claim form so I didn’t bother. Kicking myself now as it will mean yet another 3 month wait before I see that cash and the timber frame vat is in 5 figures. So as a general rule it is probably prudent to include supporting evidence for any invoice that doesn’t have the full list of items noted on the invoice itself, so window schedules for example. You can provide it later of course but it will delay the refund. 

[Jeremy Harris]

Our timber frame came as a design, supply and installation package, complete with the passive slab foundation, so the whole lot was zero rated for VAT, including the frame design work and the structural engineer's sign off.  Made life a lot easier!

[newhome]

1 minute ago, JSHarris said:

Our timber frame came as a design, supply and installation package, complete with the passive slab foundation, so the whole lot was zero rated for VAT, including the frame design work and the structural engineer's sign off.  Made life a lot easier!

 

At the time the timber frame company didn't provide installation so it wasn't an option, more's the pity because 9 years is a long time to have waited to reclaim the vat although my circumstances pushed the timeline out considerably. In fact my claim has seen 3 changes of standard vat rates from 15% to 17.5% and then 20%. 

[epsilonGreedy]

1 hour ago, newhome said:

Yep! I have a built in vacuum but always use the cordless machines that cost a lot less as they are much more convenient. I never saw the point of a built in vac TBH but it was one of the things hubby wouldn’t compromise on, and I don’t think he used it once! I’ve never ever used it downstairs.

 

 

Having visited two built-in vacuum trade stands in recent months I believe the answer is that fine dust particles are not recirculated from the bag back into the room. I wonder what @lizziethinks as she is sensitive to air quality.