Self-build Vat Exemption
When you build your own home, whether you’re starting from scratch with a new build or converting a property into a residential dwelling, not only is labour essentially zero rated, but you will also be able to claim back some or all of the VAT on the materials element of the build.
How it Works?
VAT Notice 431 (NB) is the scheme that covers the VAT reclaim on new builds in the UK. The premise of self-build VAT reclaim is that you are you are building your principle private residence (not for profit or commercial purpose).
This applies if you purchase the 'shell' of a new property from a developer and complete the fitting yourself.
What's covered? and what's not.....
- Building Materials: Timber, Aggregates, Concrete & Cements
- Landscaping: Paving, Fencing, Turf & Postcrete (must be part of original plans)
Domestic appliances, decorative goods and furnishings are generally not included.
How to claim
Once the project is finished, collate all receipts and invoices for the materials that you intend to claim VAT back on and submit to HMRC within 3 months, alongside proof of completion.
It is important that are all documents are the original, and include the suppliers VAT registration number, plus lists the quantitiy, description and price of the goods.
Anyone who buys eligible goods for your project can make the claim (including your builder).
Extensions & Conversions
Conversions of non-residential properties (those uninhabited for 10+ years) are covered by another scheme - VAT Notice 431 (C).
Any work undertaken on an already completed building - I.E refurbishment, adding an extension, converting the loft or garage; will not be covered, although some exemptions (5% VAT) exist on these projects in 'run-down' less economically attractive areas.