We’re pleased to share news about reduced VAT rates for building projects :
Zero Rates for Vat
This applies to all new builds as long as the building is self contained that it can be sold on its own and used independently of any other property including businesses. It must have proper planning permission and any existing buildings on the site must be demolished completely to ground level.
All labour on qualifying buildings can be zero rated together with building materials supplied.
Reduced Rate of Vat-5%
Where construction services are provided other than new builds these may be eligible for a 5% reduced Vat Rate for the work including materials.
This special rate applies to work on done on residential accommodation including renovating properties that have been empty for at least 2 years.
There are exceptions which allow you to charge the lower rate even when the property has not been vacant for all of that time, for example, it has been occupied to prevent the property being vandalised.
As long as no renovation has been carried out in that last two years and your building supplies are supplied to the occupier in the year of them acquiring the property the new rate can apply and you may be able to gain an advantage by your quote as a result being lower than your competitors.
It is possible for the property owner to move into the habitable part of the property after the renovation work has commenced without jeopardising the 5% rates.
It is important that you have the evidence to show the property meets to criteria to count as empty by either the owner or third party such as the Council.
When carrying out such house renovations for a private customer who is not able to claim any Vat this could put you in a good position.
Vat Refund for a DIY Builder
If you qualify for the above a form can be completed to re-claim the Vat you have borne if you have built a new home or converted a non residential building into a home.
Detailed information has to be given together with supporting plans, planning permission and all of the invoices for materials. You cannot claim Vat in respect of services such as skip hire or plant hire.
For further advice on this or other accountancy matters, contact BACAccountants your Wellingborough Accountants on 01933 227711.