Project Advice
VAT Reclaim
Most of the VAT paid out on your build project can be reclaimed. These rules were brought in place to level the playing field with those who buy a new build house from a developer and don't have to pay VAT.
The arrangements for reclaiming the VAT are set out in VAT notice 431NB, VAT refunds for 'do-it-yourself' builders and converters. A copy of this form can be obtained from your local Tax Office or you can download the form here
The scheme only applies to those building or converting for their own domestic use and occupation and isn't available for property developers.
The claim must be made within three months of the building being completed and you only get one chance to claim, so you need to get it right first time. You can make a claim for most of the goods and materials brought from a VAT registered supplier which are incorporated into the building or the site.
You can reclaim most of the VAT from your build and you will have 3 months to reclaim once your build is completed
Examples of what you can and can't claim
Claim | No Claim |
---|---|
Fitted Kitchen Units | Free-standing kitchen units |
Wood Flooring | Carpets |
Fitted bedroom furniture | Design fees |
Burglar Alarms | Plant Hire |
Paint | Electrical Appliances |
Solar Panels | Tools |
VAT - New Builds
New Build is zero-rated, which means that a VAT registered builder or subcontractor must zero-rate their work and not charge VAT on any labour-only or supply and fix contracts.
Although the builder or subcontractor will have to pay VAT when they purchase materials, they will be able to claim that back at the end of each month, or whatever period they have agreed with HMRC, and they must not seek to pass it on.
A self builder will have to pay VAT at full rate for the purchase of any materials that they make on their own account, this is largely recoverable at the end of the project.
- Labour is zero rated
- 20% VAT on materials can be reclaimed
VAT - Conversions
- Labour is zero rated
- 20% VAT on materials can be reclaimed
- 5% on labour can be reclaimed if through VAT registered builders
VAT - Renovations
- 20% VAT payable on labour & materials
- 5% VAT charged on materials and labour for properties occupied for 2 years or more if VAT registered build used. Not recoverable
- If property unoccupied for 10 years or more, VAT same as for conversions