Claiming VAT on a new build development

Gnasher86

Hi everyone, i have a question for you all...

I have recently purchased a Detached House as part of a development that comes with a Turnkey finish. I have run into the usual problems of kitchen designers, bathroom company etc being appointed by the builder and therefore not have any competition when pricing any upgrades on the turnkey.

I am going to let them put in the turnkey finishes for the most part and will look to complete the rest of the work myself, through contacts i have in trades etc once the keys are handed over, i have checked the contract and this is above board and does not breach the contract with he developer. Price wise this is saving me up to 50% on some aspects so is well worth my while.

However what i am wondering is can i claim back the VAT on these additions such as Kitchen extension, built in furniture etc, as technically the house is a new build, its just the original builder isn't doing these fittings, its my own subcontractor.

Regards

TheCyclingProgrammer

This any help? https://www.gov.uk/vat-building-new-home/eligibility

leveller2911

If I remember correctly reclaiming the VAT can only be done once so how will the builder claim back all the vat he has paid out and you "the owner" making a second claim?. I also thought you had to be registered for vat to be able to claim it back. I would have thought once the keys are handed over any work carried out after (extension) wouldn't count as part of a new build.Its extending an existing property.

Theres a really good poster on here called Pennywise and she may wel be able to point you in the right direction.

Gnasher86

That was my thoughts, that it can only be done once; by the builder. However a couple of people have told me that if the work is done within 3 months of completion then it still counts as a new build, so i'm not sure if i can submit a further application or not.

leveller2911

Gnasher86 wrote: »

That was my thoughts, that it can only be done once; by the builder. However a couple of people have told me that if the work is done within 3 months of completion then it still counts as a new build, so i'm not sure if i can submit a further application or not.

Best to check with an accountant as HMRC are dire to deal with on the phone. I'm registered for vat and they will never give an answer to a question they will just give you the relevant page number in the vat book to read and then its down to me to interpret the rules.

I think the 3 month rule may be for the original claim.So the builder has 3 months (1 vat quarter) to make the claim but I may well be wrong.

Doozergirl

I'm quite certain that the one claim belongs to the builder.

A kitchen may be, but built-in furniture is not zero rated.

The HMRC technical guidance is there to be googled and read through.

missile

I made a claim for VAT paid on materials I purchased to modify a new build. It was quite easy, filled in the form attached the receipts and got a refund promptly.

Gnasher86

I am 99% sure than built in bedroom furniture can be zero rated.

Came across this though on HRMC website:

Once construction is ‘complete’, any further supplies of construction services (other than those mentioned at 3.3.6) are no longer ‘in the course of construction’ and are thus ineligible for the zero rate.

Examples:

a developer is in the process of constructing a house for sale. The house buyer, however, would like the house to include an attached conservatory and so contracts with a conservatory specialist to supply and install the conservatory prior to him moving in. The developer refuses the conservatory supplier access to the site until after he has finished his work and the house has been conveyed to the house-buyer. In such circumstances, the supply by the conservatory supplier is not work ‘in the course of the construction’ of the house but work to an existing building and cannot be zero-rated.

So i basically have to get the work done before the hand over from the developer.

J_B

I've done a couple of vat reclaims on UK self-build projects.

Simply, you only get one bite of the cherry.

Once the project has been 'signed off' by the building inspector, you then get X months to submit the claim.
You can't claim on anything after that.

Doozergirl

HMRC are very clear on fitted furniture. Only kitchen units really count for zero rating.

The reason that new builds have very simple wardrobes that have studwork for sides and regular doors is precisely to avoid paying full rate VAT.

Paragraph 13.5.2 is specific.
https://www.gov.uk/government/publications/vat-notice-708-buildings-and-construction/vat-notice-708-buildings-and-construction#the-vat-meaning-of-building-materials

I am almost certain that you are not going to be able to do what you think. No developer in their right mind is going to allow other contractors on site before completion to jeopardise their work and invite warranty issues. The very fact that they are providing the turnkey finish means they aren't going to play that game with you. They are providing you with a complete building - any opportunity to zero rate another contract is gone.