One can apply for a VAT refund on building materials and services on the following situations:
- Building a new home
- Converting a property into a home
- Building a non-profit communal residence such as a hospice
- Building a property for a charity
The building work and materials are required to qualify and one must apply to HMRC (HM Revenue and Customs) within 3 months of completing the work. The application form includes all the required guidance on what building projects and materials qualify for a VAT refund. The basics include the following:
New homes: The home must:
- Be separate and self-contained
- Be for you or your family to live or holiday in
- Not be for business purposes (a person can use one room as a work from home office)
The builders working on new buildings should be zero-rated and one is not required to pay any VAT on their services.
Conversions: The building which is being converted must generally be a non-residential building. Residential buildings qualify if they haven’t been lived in for at least 10 years. One may claim a refund for builders’ work on a conversion of non-residential building into home. However, for other conversions, the builders can charge a reduced VAT rate.
Communal and charity buildings: One may get a VAT refund if the building is for any of the following purposes:
- Non-businesses- one can’t charge a fee for the use of the building
- Charitable, such as a hospice
- Residential, such as a children’s home
Building materials: One may claim a VAT refund for building materials that are incorporated into the building and can’t be removed without tools or damaging the building.
One can’t get a VAT refund for the following:
- Materials or services that don’t have any VAT, for example they were zero-rated or exempt
- Hiring machinery or equipment
- Building projects in the Channel Islands
- Professional or supervisory fees such as architects, surveyors
- Buildings that can’t be sold or used separately from another property because of a planning permission condition
- Buildings for business purposes
- Building materials that aren’t permanently attached to or part of the building itself
- Fitted furniture, some electrical and gas appliances, carpets or garden ornaments
In order to claim a VAT refund on a new build, one is required to fill in the form 431NB or 431C to claim for a conversion. You can call on VAT Helpline Number to find out where to send the form. The forms include all the required guidance notes such as how to work out your VAT.
There are certain things about VAT one need to know. These include the following:
- One must claim within 3 months of the building work being completed.
- One will usually get the refund in 30 working days of sending the claim.
- One must include the following with their claim:
- Bank details, so that the refund can be paid
- The planning permission
- Proof the building work is finished, such as a letter from your local authority
- A full set of building plans
- The invoices including tenders or estimations if the invoice isn’t itemised.
- Bills and any credit notes.
VAT invoices must be valid and show the correct rate of VAT. Else they won’t be accepted.