Spoil & vat

[nod]

Is the removal of spoil Vat rated

If so can it be reclaimed

[ragg987]

Removal is a service so you will not be able to reclaim VAT - services must be zero-rated at source.

 

I cannot see why it should not be zero-rated. In my case spoil removal was part of a wider external works package and was all zero-rated.

[TerryE]

You need to be careful here.  Our builder zero rated all of his work including groundworks and spoil removal but this was as part of a bundle contributing to the new build.  A quote for spoil removal on its own might well attract VAT.  We had to pay VAT on services such as our geo survey, our archaeology survey, and scaffolding as these were separate contracts.  

[nod]

47 minutes ago, TerryE said:

You need to be careful here.  Our builder zero rated all of his work including groundworks and spoil removal but this was as part of a bundle contributing to the new build.  A quote for spoil removal on its own might well attract VAT.  We had to pay VAT on services such as our geo survey, our archaeology survey, and scaffolding as these were separate contracts.  

Thank you both for your replies

I did suspect it would come under services

I may just have to stand the 2k or so vat

 

[jack]

47 minutes ago, nod said:

I may just have to stand the 2k or so vat

 

 

Do look into it further.  Not all services are off limits for zero rating.  For example, plumbing is a service and is clearly zero-rated for a new build.

 

I don't know the answer in this case, but suspect it may depend on how closely associated with the building of the house it is.  Muckaway following digging of foundations would be closer to that than reshaping a nearby bank for landscaping purposes, for example.  Hopefully @Temp will be along to give some more guidance in the near future!

 

[PeterW]

How much are you carting away ..?? £10k indicates around 60 loads, or 900 odd cubic metres ..!

 

Is there a better way to use some of that on site ..?

[nod]

22 minutes ago, PeterW said:

How much are you carting away ..?? £10k indicates around 60 loads, or 900 odd cubic metres ..!

 

Is there a better way to use some of that on site ..?

Id worked it out around 50 But I suspect nearer to 60

[TerryE]

+1 on Peter's comment. If you are removing 2000 tonnes of spoil, then this is something that merits optimisation. Also if your new site levels are part of your planning requirement then this isn't a service but a necessary part of the construction and therefore either zero-rateable or reclaimable. That would be my thinking. We removed just under half that, but in our case we had to drop the FFL to achieve required ridgelines, so this was an integral part of the build.

Edited September 2, 2016 by TerryE

[Temp]

Just to confirm that page three of the reclaim form says you can't reclaim VAT on "muckaway" or "separate invoices for transport or delivery".

 

However if you could get a quote for a package of work  say "Digging out foundations and removal of spoil" then the whole lot should be charged to you at the lowest applicable rate which would be zero (labor is zero rated).

 

There is also a section in VAT 708 that might be useful...

https://www.gov.uk/government/publications/vat-notice-708-buildings-and-construction/vat-notice-708-buildings-and-construction

 

3.3.4 Work closely connected to the construction of the building

Subject to sub-paragraph 3.3.6, your work is closely connected to the construction of the building when it either:

(a) allows the construction of the building to take place, such as when you:

• demolish existing buildings and structures as part of a single project to construct a new building or buildings in their place (please note that the granting of a right to remove materials is not the supply of demolition services and is standard-rated) * provide or improve an access point to a building site to allow deliveries to be made
• carry out ground works (including the levelling and drainage of land) as part of the process of constructing a new building or buildings in its place
• provide site clearance or ‘builders’ clean’ services
• secure the site

Or,

(b) produces works that allow the building to be used, such as works in connection with:

• the means of providing water and power to the building (this can extend to the work required to make the connection to the nearest existing supply)
• the means of providing within the development site access to the building (for example roads, footpaths, parking areas, drives and patios)
• the means of providing security (such as walls, fences and gates – but note that most electrical appliances are always standard-rated. Further information is in paragraph 13.6.)
• the provision of soft landscaping within the site of a building (such as the application of top-soil, seeding with grass or laying turf)

Please note that the planting of shrubs, trees and flowers would not normally be seen as being ‘closely connected…’ except to the extent that it is detailed on a landscaping scheme approved by a planning authority under the terms of a planning consent condition. This does not include the replacement of trees and shrubs that die, or become damaged or diseased.

 

It is not possible to produce an exhaustive list of services that are closely connected to the construction of the building, and each case not included above must be looked at on its own merits.

 

(My bold)

[nod]

8 hours ago, TerryE said:

+1 on Peter's comment. If you are removing 2000 tonnes of spoil, then this is something that merits optimisation. Also if your new site levels are part of your planning requirement then this isn't a service but a necessary part of the construction and therefore either zero-rateable or reclaimable. That would be my thinking. We removed just under half that, but in our case we had to drop the FFL to achieve required ridgelines, so this was an integral part of the build.

Thank you both for taking the time to look into this

The vast majority of the spoil will be removed from the deep footings

So little way round it

 

The good news is that I called into the Quarry which is across the road and about half a mile down the lane

They will remove the spoil supply the mot But due to the large amount of C20 concrete 150 to 200 cube and the close proximity of the plot They have priced the concrete at £71 and mot at £11 Which should help towards costs  

[TerryE]

@nod,  my comment about optimising didn't refer to the volume itself but for this volume there's scope to squeeze the VAT eligibility and the ££ per tonne.