VAT Building Work

VAT on Self Build Homes, Extensions and New Builds

Q - We are hoping to buy a small bungalow that has detailed planning permission for a substantial extension (the extension will more than double the size of the house). Can you tell me what the VAT reclaim situation is on such a project because we been told that extensions do not qualify for
reclaims.

A - I'm afraid your informant is correct. In their booklet ' VAT Refunds for Do-it-Yourself Builders and Converters', paragraph 4.1.2 states that you can only reclaim VAT for an extension if you are creating an additional dwelling not extending one. Call 0845 0109000 and ask for a free copy of HM Customs and Excise of this booklet.

Q - I would like to build two flats and wonder whether I will be able to reclaim the VAT on the materials?

A - You can only claim the VAT back if you are building a house or flat for your own use and not for commercial reasons. Call HM Customs & Excise (Publications) on 0845 0109000 and ask for a free copy of ‘VAT Refunds for Do-It-Yourself Builders and Converters'.

Q - Does the VAT refund for materials include the cost of scaffolding that we used for our new build?

A - No, scaffolding doesn't qualify for a reclaim, only building materials. Call HM Customs & Excise (Publications) on 0845 0109000 and ask for a free copy of ‘VAT Refunds for Do-It-Yourself Builders and Converters' - this sets out what you can claim for and what you can't

Q - I am thinking of carrying out a self build and have been told that could save about 30% by doing all of the work myself. If this is the case, is the VAT reclaim on top of this saving. I am doing research into starting my own business by doing two self builds per year. Can I reclaim VAT with every self build I complete?

A - The 30% saving by self building is dependent upon how much work you do yourself - you can't do the electrical work (unless you are An electrician) You could only achieve this figure if you carried out most of the labour so the more work you sublet, the lower the savings figure becomes. Yes, you can reclaim the VAT for the materials for each build in normal circumstances and if you decide to go ahead with your business plan it would be a good idea to register now as an intending VAT company. Call Customs and Excise on 0845 0109000 and ask for a free copy of 'VAT refunds for Do-It-Yourself Builders and Converters'.

Q - I have received a quote from a builder of £950 per square metre to build a new house. Will this include VAT?

A - If a contractor is giving you a firm quotation it should include VAT but the £950 per m2 sounds more like an indication of costs. Most of the costs in the industry exclude VAT because the builder may not be registered or the work might not attract VAT. But to make sure where you stand, you will have to ask him what is included and excluded for the avoidance of doubt.



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