VAT query - building work

Louby77

hello
I've got a query about paying VAT on building work being carried out on my home- I know the company Ive used are VAT registered as they are a large company, but just wondered if they subcontract a smaller company to do some of the work (eg tiling) and they aren't registered, do I still have to pay the VAT at the full rate to my building company? Also I read somewhere about things like new boilers/insulation being chargeable at a lower rate, is this correct? My invoices have all been the amount charged by builder with an automatic 20% added to everything.
thanks

chrismac1

There are various possible rates chargeable by builders from 0% to 20%. Yours sounds like it should all be at 20%, any decent builder will know what can be charged at lower rates.

For a VAT-registered business, the way it works is that everything is at 20% unless something is in the VAT Act saying it is lower, so you pay the 20% rate on everything charged by the builder. This is why some builders, including clients of mine, suggest to customers that they contract directly with some of their non-registered sub-contractors to get their charges free of VAT.

However, this is not always suitable as you then need a customer who is OK managing different sub-contracts, and hence may need to consider insurance so overall I'd say your builder is doing everything he or she should be.

Louby77

thanks for your help! I just grudge paying so much in VAT on top of an already very expensive job so was looking for any little way to save some cash, never mind