lucius
Well-Known Member
Better get that dialect right mate they don't do Northeners in Essex, Ime from N.London myself but now in Herts, don't do Essex myself full of West Ham racists.
Vat on a new build?
- Thread starter Parko
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BetterTAX
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plasterjfe
Private Member
We did four schools this year but they were additions to existing school buildings so we charged vat as normal but I never evwr looked into if a completely new from scratch school was vat rated.....assumed they would be zero too as per new build but thete you go
www.jfe-rendersystems.co.uk
www.jfe-rendersystems.co.uk
From a self build magazine I read regularly, the reasons for the VAT exemption for self builders:
Those buying a new home from a builder or developer don’t have to pay VAT on top of the purchase price, because such dwellings are exempt from VAT. It would, therefore, be singularly unfair if those building their own home had to pay this tax. In recognition of this fact, HM Revenue & Customs (HMRC) has put in place certain arrangements for the private individual building their own home, or converting a non-residential building into a home, to reclaim most of the VAT paid out.
As a private individual building my home at the moment, most materials that I purchase myself I can reclaim the VAT on once the build is complete (completion certificate issued). Any labour I use must be zero rated and cannot charge VAT. Any company who offer both a supply and fitting service must zero rate their entire invoice including the materials and claim the VAT back on the materials themselves giving the details of the job (planning ref, address etc) to HMRC to prove the job was eligible for zero rated VAT. There are some exceptions to what materials and services can be zero rated, but generally anything that makes up the fabric of the house and is considered fitted and cannot be removed without the use of tools and refinishing to make good can be zero rated, things like skip hire, waste removal, architects fees cannot be zero rated and VAT must be paid as applicable.
If a self builder is incorrectly charged VAT on labour or supply and fitting services they cannot claim it back and are left out of pocket by 20%, so it's very important that the right amount of VAT to charge is stated early on and both parties are aware of the situation.
Self builders are usually pretty aware of the VAT situation as the money involved in the reclaim can amount to thousands of pounds upon completion. However some companies still incorrectly insist that they charge the VAT and that the self builder can claim it back themselves unaware of this minefield of VAT exemption!
If you are a VAT registered company and a self builder tells you to zero rate your invoice of a supply and fitting service, or a labour only service then make sure you have the name of the self builder, the address of the build and the planning application reference so you can pass those to HMRC to prove the job was zero rated. Also, the zero rating applies to building a home, converting a barn and some renovation projects (conditions exist to determine which renovation projects, some are not VAT exempt but the VAT is charged at 5% instead of 20%).
Here's a link to HMRC (Notice 708) with details on the rate of VAT for various types of construction project. HM Revenue & Customs
Those buying a new home from a builder or developer don’t have to pay VAT on top of the purchase price, because such dwellings are exempt from VAT. It would, therefore, be singularly unfair if those building their own home had to pay this tax. In recognition of this fact, HM Revenue & Customs (HMRC) has put in place certain arrangements for the private individual building their own home, or converting a non-residential building into a home, to reclaim most of the VAT paid out.
As a private individual building my home at the moment, most materials that I purchase myself I can reclaim the VAT on once the build is complete (completion certificate issued). Any labour I use must be zero rated and cannot charge VAT. Any company who offer both a supply and fitting service must zero rate their entire invoice including the materials and claim the VAT back on the materials themselves giving the details of the job (planning ref, address etc) to HMRC to prove the job was eligible for zero rated VAT. There are some exceptions to what materials and services can be zero rated, but generally anything that makes up the fabric of the house and is considered fitted and cannot be removed without the use of tools and refinishing to make good can be zero rated, things like skip hire, waste removal, architects fees cannot be zero rated and VAT must be paid as applicable.
If a self builder is incorrectly charged VAT on labour or supply and fitting services they cannot claim it back and are left out of pocket by 20%, so it's very important that the right amount of VAT to charge is stated early on and both parties are aware of the situation.
Self builders are usually pretty aware of the VAT situation as the money involved in the reclaim can amount to thousands of pounds upon completion. However some companies still incorrectly insist that they charge the VAT and that the self builder can claim it back themselves unaware of this minefield of VAT exemption!
If you are a VAT registered company and a self builder tells you to zero rate your invoice of a supply and fitting service, or a labour only service then make sure you have the name of the self builder, the address of the build and the planning application reference so you can pass those to HMRC to prove the job was zero rated. Also, the zero rating applies to building a home, converting a barn and some renovation projects (conditions exist to determine which renovation projects, some are not VAT exempt but the VAT is charged at 5% instead of 20%).
Here's a link to HMRC (Notice 708) with details on the rate of VAT for various types of construction project. HM Revenue & Customs
essexandy
The Lake Governor
Good post, just one question. Are you related to johniosaif?
Thanks and no relation to me, as far as I know.
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