VAT & Self Build Finance
It is typically quite straightforward as to what you can claim for, and what you can not, however the key things you need to know are;
- You can make a claim for: a new house of an ordinary private domestic residence, and you will need detailed proof of VAT paid on all the goods for which a claim is to be made.
- Claim within 3 months of completion: The claim must be made within three months of the building being completed and you only get one chance to claim, and so you need to get it right first time.You can make a claim for most of the goods and materials bought from a VAT registered supplier which are incorporated into the building or the site.
- You cannot claim for: furniture, carpets, curtains, white goods, trees and plants, nor for burglar alarms, professional services, equipment hire, transport of materials and tools used.
And some tax-saving information and tips;
- Keep all your receipts: You need these to make a reclaim. Also, you should not be paying out VAT on labour so scrutinise your invoices from your contractors.
- The more we do, the less you pay: VAT paid out on professional fees e.g. an architect, or shell erection, is not eligible for relief unless it is supplied as part of a design and build contract.
- Design-in your storage units: If you're thinking of buying furniture for your new home, before you go rushing out to buy wardrobes, consider having storage built in. Fitted furniture is not eligible for VAT relief but storage, including wardrobes, are eligible if designed into the fabric of the building, e.g. it encloses a space bordered by the walls, ceiling and floor (the third wall can be a stub wall). On opening the wardrobe, the painted wall must be visible and there should be no more than a single shelf and a rail for hanging clothes. You can of course adapt to suit once the building is complete.
- Go for 'free' white goods with your kitchen: White goods such as ovens, hobs, integral dishwashers and fridges are not eligible for VAT relief even if they are permanently built in. However, offers on kitchen units that include 'free' white goods can leave an unofficial loophole in the collection system.
- Think ahead, before it's too late: Make sure that you undertake all qualifying work before the main dwelling is completed. Labour and materials for hard landscaping for the driveway, main paths to and from your new dwelling, retaining walls and patios are all eligible for VAT relief, providing it is completed during the construction of the dwelling - so don't leave this work until it is too late
Other projects...
- Conversions: These are also zero rated but, unlike new build, you do have to pay out VAT on labour costs, although you can reclaim this at the end of the project
- Renovations: The same VAT rules which apply to conversions also apply to renovations if they have been unoccupied for at least 10 years
- Unoccupied Renovation: A 5% VAT rate applies to; the renovation of dwellings which have been unoccupied for 3 years, the conversion of an existing property into multiple dwellings, the conversion of a dwelling into a care home, or the conversion of a dwelling into bedsit accommodation.
HM Customs & Excise publish a very good guide on this matter - VAT Refunds for do-it-yourself Builders, dated January 1996 and under Notice 719. This clearly explains who is eligible, how to make a claim and what can be claimed.
Click here to view the website.
Characteristically, our professionals have done the hard work for you. Simply click below to download the relevant guide and forms.
Download pdf forms below
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Form Reference
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Description
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Download
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VAT 431
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This notice gives details of how to fill in all parts of form VAT 431 refunds for DIY builders and converters.
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VAT 431
(Pt 1)
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This form enables DIY builders or converters to reclaim VAT on the main costs of construction or conversion.
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VAT 431
(Pt 2A)
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This form is for DIY Builders reclaiming VAT on construction or conversion to list details of the materials and goods used.
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VAT 431
(Pt 2B)
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This form is for DIY builders reclaiming VAT on construction or conversion to list services used.
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VAT 431
(Pt 3)
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This form is for DIY builders reclaiming VAT on construction or conversion costs to list goods, materials and services where the invoices show VAT separately.
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VAT 431
(Pt 3) CS
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This form is a continuation sheet for form VAT 431 (Pt 3)
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VAT 431
(Pt 4)
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This form is for DIY builders reclaiming VAT on construction or conversion costs to list goods, materials and services where the invoices do NOT show VAT separately.
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VAT 431
(Pt 4) CS
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This form is a continuation sheet for form VAT 431 (Pt 4)
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