VAT on replacement windows?

[Houch]

Hi,

 

We had big problems with our windows for our self-build project and we have had to replace them. We settled with the original company and bought some more from a different manufacturer. The fitter tells us that he's taken advice and insists we're definitely liable to pay VAT on the basis that they're replacements. I'm convinced we should be zero rated for VAT on the fitting in the same way as we are for any other work. We're still at first fix stage, the house isn't habitable and we haven't put our VAT reclaim in yet.

 

Can anyone clarify please and, equally if not more importantly, let me know how I  can get written confirmation from somewhere (HMRC?) that will satisfy/reassure the installer?

 

Thanks

 

Dave

[ProDave]

Make sure there are no windows in the house when he comes and deny all knowledge of any windows ever being there.
 

[jamiehamy]

I'm afraid HMRC will not give any assurance - sadly, their 'Help' line is quiet the opposite. Phone it twice and you'll get a different answer. Ask for a written confirmation on the advice - and you'll be told they don't do that. 

 

The alternative is to get them fitted by someone else and just claim the VAT on the materials as usual - but will lose out on the labour. The problem is that there is little you can do to persuade them to change their mind. If they think they will be liable, then that means that possible THEY will get the bill if at some point down the line someone decides VAT should have been charged. 

 

Not ideal unfortunately. What happened with the previous windows?  I'm curious as we're having serious issues with ours. 

[Houch]

Thanks guys. The windows are fitted now and it's only when I've received the invoice after asking them to zero rate it (which they didn't challenge at the time) that they're now insisting on VAT. We did separate the supply and fitting so I should be okay reclaiming the supply costs and I'm still fighting the issue asking for the grounds, rationale and contrary guidance that they're relying on. I think your right jamiehamy in that they're just going for the safe option at my expense. 

 

I can't go into too much detail about the company that supplied the old windows as we have now settled and there was a gagging clause in the settlement agreement where I can't publicly name and shame or review them. I had to accept that to get the refund. In summary though, the problems I had were around severe, and I mean severe leaks. Sash horns and other trims falling off (they were PVCu sliding sash windows). Chrome furniture rusting really badly. Exterior seals perishing. All of this happened within few months. If you've got some specific issues with a company, I can tell you privately whether it was the same one (it was a biggish manufacturer) and how I resolved it.

[jack]

Would they consider invoicing you for the total amount as "supply"?

[PeterW]

Ok so who removed the old windows ..?? And is there an invoice to say you paid twice ...??

 

If the 'new' company had to remove and replace then they may have a point, but if you can get an invoice with supply on it then you can claim the VAT back. 

 

Otherwise if they had clear openings to work with I can't see their issue ..??

[nod]

Ive been vat registered for 30 years and still get caught out

Its easier for a company to charge the  vat rather than risk being caught out later

I would suspect that the second company will be mindful of the first invoice surfacing later down the line

and leaving them  open to a vat charge on the labour.

 

    Hope this helps Gary

   

[ragg987]

I would argue that these are not "replacement windows" in the traditional sense, but are rectification work against the original build, so should be in scope of the zero-rated VAT regime. Especially as you are not claiming zero-VAT twice having been refunded for the original faulty works, plus are still in build stage (for VAT purposes).

 

I can understand your supplier not wanting to get stung down the line and wanting to charge VAT now. I think this is the key point to address. Perhaps a call to HMRC to explain the circumstance and ask them their view. If they refuse to put it in writing then make a note of the date, time and person you spoke to plus advise given.

[Houch]

I think we've resolved it today.

 

They've now come back and said that their local tax office have advised that, providing the building inspector hasn't issued a certificate (presumably making the building 'complete' under the provisions of VAT notice 708) then it 'is being constructed' and therefore shouldn't attract VAT. That was my interpretation all along. If the guidance even allows for snagging after completion to be zero rated then I really can't see an argument that the fact that the first windows failed and had to be replaced somehow negates the principles of zero rating. 

 

I strongly suspect that Nod's assessment was right, i.e. it made their accounting simpler and removed any potential risk for them in the future - but at our expense.

 

All's well that ends well and it's a few hundred quid that we can spend on other stuff. 

 

Thank you everyone for your advice and suggestions.

[jack]

Augurs well that they were willing to make the effort with the tax office.  Glad you got it resolved!

[Houch]

Thanks Jack, the support & advice is appreciated.