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Self Build VAT Reclaim
Further help and advice If you need general advice or more copies of Customs and Excise notices, please ring the National Advice Service on 0845 010 9000. You can call between 8 am and 8 pm, Monday to Friday. If you have hearing difficulties – please ring the Textphone service on 0845 000 0200. If you would like to speak to someone in Welsh – please ring 0845 010 0300, Monday to Friday from 8.00 am to 6.00 pm. All calls are charged at the local rate within the UK. Charges may differ for mobile phones. Contents 1 Introduction 2 Who can claim? 3 What buildings are covered? 4 What goods and services can I claim for? 5 Making your claim Annexes 1.1 About this notice This notice explains how refunds of VAT can be obtained on many goods and services purchased for the construction or conversion of certain buildings. The Law which governs these arrangements is the Value Added Tax Act 1994 Section 35, and Regulations 200 and 201 to Part XXIII of The Value Added Tax Regulations 1995. Further information on VAT and construction is contained in Notice 708 Buildings and construction which is primarily intended for commercial builders and developers. 1.2 General Please read this notice before claiming a refund from Customs and Excise. It tells you whether you are eligible to make a claim, which kinds of buildings it applies to and which goods and services are allowed in your claim. A checklist is included at the back of this notice to help you. The basic rules are: (a) New Buildings If you are constructing a new building, you may be able to claim back the VAT that you pay on the purchase of building materials but not VAT paid on any services. However, most services performed in the construction of a new building are free of VAT. (b) Conversions For conversions, you can claim back the VAT on the materials and, if you have paid for some help, on construction services such as those of a builder, plumber, electrician etc. You will find this explained fully at Section 3 and Section 4 of this notice. If you are registered for VAT and are building or converting an eligible property for a non-business purpose, you must use this scheme to claim back the VAT. You must not use your VAT return. 2.1 Am I eligible to claim? You can claim if-
2.2 Who cannot claim? (a) Private owner occupiers - you cannot use this scheme if you are constructing or converting the building with the intention to sell or let or for some other business reason. However, this does not affect the right of private owner-occupiers to make a claim even though they may run a business from home, or if they decide to sell at a later date. If you are building for business reasons, you should find out whether you can recover the VAT by being registered for VAT. If you are not already registered, you can ask your nearest VAT enquiries office for Notice 700/1 Should I be registered for VAT? (b) Sports clubs and other clubs and associations - if you charge subscriptions for membership, or charge fees to non-members, you are regarded for tax purposes as being in business and cannot use this refund scheme for that reason. (c) Charities - cannot claim for non-business conversions unless the conversion creates non-business residential accommodation. (d) Housing Associations and their members - cannot use the scheme. These Associations are regarded as being in the business of building houses for sale or letting. 3.1 New buildings Claims can be made for completely new buildings designed as, or intended for use for the following purposes: a. dwellings (for private residential occupation)b. communal residential buildings (but not those which will be run as a business) c. charity-run buildings, strictly for non-business purposes d. charitably-run village halls or other buildings to be used similarly in providing social or recreational facilities for a local community. (This includes church halls which will be available for hire). 3.2 Conversions For conversions completed since 21 July 1994, do-it-yourself builders have been allowed to claim VAT refunds in respect of buildings which they have converted into a dwelling or communal residential building. The previous use of the building must have been non-residential, although you can claim for a building which may have been a dwelling or a residential establishment before 1st April 1973 but which has not been used as one since. Therefore you may be able to claim for converting derelict buildings, or an old dwelling which has had a different use since 1973. Common examples of conversions are: agricultural barns and oast houses into single dwellings;office and commercial buildings into flats. Unusual conversions can also qualify such as: water tower and lighthouse conversions;disused railway stations, provided that in the above examples you are not converting existing living accommodation, or, if you are, that you are creating an additional self-contained dwelling which could be disposed of separately without planning constraints. 3.3 What do we mean by "dwelling"? A claim for a dwelling can be allowed only if all of the following conditions are met: a. it consists of self-contained living-accommodation;b. there is no direct internal access to any other dwelling or part of a dwelling; c. the separate use or disposal of the dwelling is not prohibited by the term of any covenant, statutory planning consent or similar provision; and d. the construction or conversion has been carried out in accordance with statutory planning consent. 3.4 What is not considered to be a conversion? Extensions and enlargements are not covered by the scheme unless you are building onto an existing building to create your eligible building, such as a new semi-detached house without internal access to the existing building. An existing building is one which has not been demolished to ground level or which does not have just a single facade (or a double facade on a comer site) retained as a condition of planning consent or similar permission for the new building. Alteration of an existing building which does not create an additional self-contained dwelling must be excluded from your claim. 3.5 Must I construct or convert the building myself? No. You can employ any specialist help you need. You do not have to do any of the work yourself, except as the organiser of the construction or conversion of a building. The key condition is that you must not be doing this for a business reason. 3.6 What about charitable and residential buildings? Non-residential buildings intended for use by a charity must be new (not conversions) and must not be used for a business purpose. Charities can make a claim, or an individual or a group of volunteers can make a claim if they have built and given a building to a charity. Relevant residential buildings must not be used for a business purpose. For new buildings- other than dwellings, you must issue to each contractor you employ a special VAT certificate about the intended use of the building, so that you are not charged VAT. An example of the certificate you can use is at Annex A of this Notice. The VAT office which issued your claim form can explain more about the use of the form. 3.7 Other works If the following are built at the same time, and are covered in the necessary planning permission, you can also claim for the construction of a. a domestic garageb. a conservatory attached to the dwelling c. a driveway and main paths on the site, but not ornamental garden features, landscaping and planting d. boundary and retaining walls, and boundary fences. Buildings such as greenhouses, garden sheds and other outbuildings are not included. 3.8 Finishing off the construction or conversion You can claim VAT on goods or certain services you buy to complete the construction or conversion of a building which your contractor has not finished, for example: a. a half-completed project which another DIY builder has had to give upb. a project abandoned by a commercial developer who went out of business c. a building which has been sold as a shell. You cannot claim for extra work you do on a completed building bought from a builder or developer, or for improving a building which has already been converted. Adding features to an already completed building, such as a conservatory, a patio, double-glazed windows, central heating, fully-tiled walls, or a garage are not eligible for a VAT refund. It is best to explain your intentions to the VAT office where your claim will be processed so that you get the right advice to begin with. 3.9 How will I know when my building is complete? Normally this is when it has been finished according to the original plans or in accordance with the Building Regulations. In cases of doubt, a building can be regarded as still under construction up until the date when a certificate of completion is issued by the local planning authority and all Building Regulations are complied with. 4 What goods and services can I claim for? 4.1 General The VAT you pay on all ordinarily incorporated building materials used in your construction or conversion can be refunded to you by Customs and Excise. You must not claim for consumables, tools and equipment. 4.2 What happens if I use outside help? VAT charged by any VAT registered specialists, contractors or general labourers you employ ill e treated in the following way:
4.3 Examples of goods on which you can claim back the VAT: air-conditioning, ducted wan-n-air systems, extractors and filters (including cooker hoods) and any dust-extracting systems (including built in vacuum cleaners) all ordinary building materials and joinery including all kinds of windows builders’ hardware for fixing in or on the building burglar alarms and fire alarms, including- smoke-detectors decorating materials fitted kitchen cupboards and worktops, including fitted kitchen furniture in a utility room fixed flooring material kitchen stoves, but not gas and electric cookers unless they are plumbed-in to provide hot water permanent boundary fencing plumbing and electrical installations including central heating and other fixed heaters, fires and fireplaces; bathrooms and showers saunas and pools (only if they are inside your building) turf laid adjacent to your building 4.4 Examples of goods on which you cannot claim back the VAT aerials and satellite dishes for individual dwellings carpets, underlay and carpet tiles cookers, hobs or stovescurtains and blinds electric and gas appliances, for example, washing machines, dryers, refrigerators and freezers, waste disposal units, door- bells, and electrically-operated doors (or door locks) and gates; garden ornaments, trees, shrubs and flowers. loose or fitted furniture, such as wardrobes, whether bought ready to fit, or in kit form, or the basic materials if you buy them yourself 4.5 Other goods and services on which you cannot claim back the VAT The following are examples of goods and services on which you cannot reclaim the VAT, regardless of whether you are building or converting: professional and supervisory services, including the fees of architects and surveyors, and any other fees for management, consultancy, design and planningthe purchase or hire of tools and equipment consumables which are not actually incorporated in the building (e.g. cleaning materials) transport and haulage charges including the purchase of fuel for these temporary fencing skip hire. 4.6 What about VAT incurred on the building which I am converting? Land and buildings which are definitely intended for non-business use as dwellings are exempt from VAT, when you declare this intention to the vendor. Therefore, when you buy a building for conversion, and there are no other restrictions which prevent the lawful conversion into a dwelling or other qualifying residential building taking place, you should not have to pay VAT to the vendor. If you do pay VAT, you as a do-it-yourself builder cannot claim it back from Customs and Excise. If the vendor does not know that you intend to use the building as a non-business dwelling or qualifying residential building, you may be charged VAT on the sale price. The vendor may have to do this or may have elected to do so for their own business purposes. Do-it-yourself builders who have paid VAT to a vendor who was entitled to charge it, cannot obtain a refund either from the vendor or Customs and Excise. 4.7 VAT charged in error VAT which has been charged in error cannot be claimed from Customs and Excise. When an error occurs, for example, VAT is charged on work which should have been zero-rated, it must be corrected by your supplier. 5.1 How do I claim? Suitable forms are issued by Customs and Excise specifically for your claim. They are contained in the Claim Pack (VAT431) which gives full details on how to complete the forms. To help the VAT office check your claim you must send with it: a. the Planning Permission and the plans of the building; andb. all your invoices or bills (please don’t forget credit notes for returned goods, shortages, discounts etc. - you must reduce your claim by credits received); and c. proof that you have completed the construction or conversion of your building; This evidence can be
5.2 Proof of VAT charged You must have a VAT invoice for all of the eligible goods (and, for conversions, any services) to support your claim. The goods or services must have been supplied to you and we may ask you to prove that you have paid for them. The VAT invoice must show:
For conversions only - if you receive a single all inclusive invoice from a contractor, please include a detailed estimate or specification of the work carried out. with your claim. It is important that such arrangements are agreed with your contractor before the work commences and that any goods and services covered in paragraphs 4.4 and 4.5 of this notice are separately identified and excluded from your claim. 5.3 Goods bought in other European Community member states You can claim back VAT which you have paid for eligible goods bought in any member state of the European Community. The rate of VAT may be different from the standard-rate of the United Kingdom. If you have an invoice in another European currency you should convert it to sterling for your VAT claim. 5.4 Goods imported from other countries VAT paid at importation into the European Community of goods incorporated in your building can also be reclaimed. You must provide evidence of the VAT paid, together with the originals of any shipping or transit documents showing the importation of the goods from abroad. 5.5 Goods returned to supplier, credits and discounts Any adjustments made by a supplier for returned goods,, credits or discounts must be recorded accurately on your claim to reflect the actual VAT paid. 5.6 When can I claim? You can only make a single claim, when you have completed constructing or converting your building. You cannot make periodic claims. Claims must be made no more than three months after the construction or conversion is finished. Please write and inform the VAT office if you wish to make a claim but cannot do it within the three months allowed by law. 5.7 When will I get my refund? You should normally get your refund within 30 working days of us receiving your claim, if there are no further enquiries. An acknowledgement of the claim will be sent within 10 working days. If we have any questions about your claim we will try to ask them within these 10 days. 5.8 Can I appeal? Yes. If we refuse your claim altogether or if you disagree with the amount paid, you can ask us to reconsider your claim. If you are still not satisfied, you can appeal to an independent VAT Tribunal. You should normally appeal within 30 days of the decision with which you disagree. The tribunals do not charge any fee for dealing with appeals. You can get more information about appealing from the VAT Office or the VAT Tribunal Centre. Ask for booklet number Trib. 90 "Appeals and Applications to the Tribunals". Annex A Example VAT certificate for charitable and relevant residential buildings
Is my claim complete? Use this checklist to make sure your claim is correct. Keep it handy before and during the making of the claim. All invoices and plans submitted with your claim will be returned to you.
We would be pleased to receive any comments or suggestions you may have about this notice. Please write to:
If you have a complaint or suggestion If you have a complaint or suggestion on how we can improve our service you should contact your local office or the port or airport. You will find the telephone number under "Customs and Excise - complaints and suggestions" in your local telephone book. Ask for a copy of our code of practice on complaints (Notice 1000). You will find further information on our website at http://www.hmce.gov.uk. If we are unable to settle your complaint to your satisfaction, you can then ask the Adjudicator to look into it. The Adjudicator, whose services are free, is an impartial referee whose recommendations are independent. The address is:
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