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How to Reclaim VAT on a Self Build or Property Conversion

If you’re a self-builder or converting a non-residential property into a home, we have good news for you: most of the VAT you paid out on the project can be reclaimed.

The reclaim is possible thanks to rules implemented to give self-builders and converters the same benefits as those who buy a new build home from a developer. (These purchasers don’t have to pay VAT).

This scheme applies to individuals who are converting or building a property for their own domestic use, and is not available for property developers. All claims must be made within three months of project completion, and you only have one chance to place a claim: if your paperwork is inaccurate or incomplete, there is no option of trying again.

Making a claim

Steps for reclaiming the VAT are outlined in VAT refunds for ‘do-it-yourself’ builders and converters (VAT notice 431NB), which can be downloaded from www.hmrc.gov.uk or picked up at your local Tax Office.

Claims can be made for most of the products and materials used in the self-build or conversion project, provided they were bought from a VAT registered supplier. It is important that self-builders and converters keep complete and detailed records of all VAT payments made, as well as all invoices.

The VAT invoices on everything being reclaimed must show the following:

  • VAT registration number of the supplier
  • Description and quantity of the goods / services
  • Price of each item
  • Your name and address (if the amount exceeds £100)

HMRC will require a letter or certificate of completion from the local authorities: a Council Tax assessment or valuation rating will also suffice.

Specialists in Construction Insurance

VAT recovery is a simple but thorough process, and the Customs & Excise will provide advice and instructions if needed. But if a project is especially complicated, it would be wise to engage a VAT Consultant to make the claim on your behalf.

These specially trained consultants will be familiar with all applicable rules and regulations, understand all the procedures involved, and make sure that no items have been accidentally omitted from the claim. They will also ensure that the claim is complete and submitted in a timely manner, so that your refund is received quickly.

What can be claimed?

VAT may be reclaimed on the following products and materials:

  • Paint
  • Wood flooring
  • Fitted bedroom furniture
  • Fitted kitchen units
  • Burglar alarms
  • Solar panels

What cannot be claimed?

VAT may be not claimed on the following products and materials:

  • Electrical appliances
  • Carpets
  • Design fees
  • Free-standing kitchen units
  • Tools
  • Plant hire

New Builds

VAT-registered builders and subcontractors are not permitted to charge VAT on contracts that are supply and fix or labour only. New builds fall within this zero-rated category.

Builders and subcontractors will have to pay VAT on materials purchases, but can reclaim the amount at the end of whatever period they have agreed to with HMRC. They may not attempt to pass it on.

Self-builders must pay the full-rate VAT when buying materials on their own account, but the majority of the expense is recoverable at the completion of the project.

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