5% VAT on home improvements?

MrM

Hi all. First time poster!

I'm about to start a major renovation on a house we've just bought. The work we're looking to do is going to cost around £50,000 (loft conversion, extension, kitchen, bathroom etc) and we're not at present living in the property.

One of the builders mentioned that another one of his clients is paying 5% VAT on home improvements, is this correct? I thought the property must be empty for 3 years for this to come into place?

I've found this article date 11th March 09...
www building co uk story.asp?storycode=3135832 (add dot's and slash)

On £50,000 this comes to a £5000 saving on VAT!

Any help appreciated.
Regards
Mark.

sujman

"The UK is to be given the option..."

Option being the operative word.

Dont know about the empty house rule but otherwise VAT at 15% is payable for home improvements.

MrM

I've got my accountant looking into it.

As for the empty house bit...

"A builder can charge a reduced 5% rate of VAT on work to renovate a house that has been empty for 3 years or more. "

This is similar to if you change a building into a 'dwelling' - this is also only 5% VAT.

JasonLVC

The UK has not decided whether to allow 5% on home improvements. I believe France has already enacted it (and for restaurant food also).

Currently then, 5% only applies to residential properties that have been empty for more than 2 years (it used to be 3 but changed in 2007).

It also applies to the conversion of a commercial property into a dwelling or conversion work of an existing dwelling into seperate dwellings (ie, turning a five bed house into a 4 room bedsit or vice versa).

For the work you describe in your post then VAT will be charged at the 15% rate unless you can prove the property has been empty for two years (electoral role will help here and/or call local council to confirm if they've had any council tax paid on the property for the last two years - that'll be yoiur proof).

MrM

JasonLVC wrote: »

The UK has not decided whether to allow 5% on home improvements. I believe France has already enacted it (and for restaurant food also).

Currently then, 5% only applies to residential properties that have been empty for more than 2 years (it used to be 3 but changed in 2007).

It also applies to the conversion of a commercial property into a dwelling or conversion work of an existing dwelling into seperate dwellings (ie, turning a five bed house into a 4 room bedsit or vice versa).

For the work you describe in your post then VAT will be charged at the 15% rate unless you can prove the property has been empty for two years (electoral role will help here and/or call local council to confirm if they've had any council tax paid on the property for the last two years - that'll be yoiur proof).

Thanks for the info Jason. House has been empty about 6months that's all