VAT Refund on new Kitchen?

Sigurx

We have a bought a house off plan and are completing all the remaining fixtures and fittings inside ourselves.

I know the white goods are not VAT refundable but is it possible that I ask the kitchen company to roll the white goods into price of kitchen but create a “special offer” where I the goods (fridge, ovens, dishwasher etc) come “free” with the kitchen?

Has anyone done this or asked this?

AdrianC

They won't be zero VAT, or a VAT refund - you'd just be getting a discount equivalent to the VAT amount, 16.7%. For every £120 (£100+vat), you'd be paying £100 (£83.30+vat).

Can you get a discount of that size? Maybe. But the time to ask for it would be before you agreed the deal.

Sigurx

So it’s legal to create this type of “offer”?

AdrianC

Sigurx wrote: »

So it’s legal to create this type of “offer”?

Of course it's legal to negotiate a discount, whether it's equivalent to the amount of VAT payable or whatever other amount.

But VAT will be chargeable. It's not legal to simply not pay VAT.

Doozergirl

AdrianC wrote: »

Of course it's legal to negotiate a discount, whether it's equivalent to the amount of VAT payable or whatever other amount.

But VAT will be chargeable. It's not legal to simply not pay VAT.

It's a zero rated project. If the items on the invoice fall into the category of building materials, then a full refund is due on the VAT paid.

OP, I would ask. If you don't ask, you don't get, but the invoice needs to be convincing and the appliances pretty much invisible. I guess the worst that happens is that HMRC say no on the reclaim - you want that to be on the appliances only, not the full kitchen or you're taking a mighty risk! It's a very specific question you're asking.

ProDave

You would be classed as a "self builder". A builder has built the shell for you and you are fitting out the insides. Quite a common arrangement.

As such, all you spend on fixtures should be zero rated. But of course you can't buy them zero rated.

So the way around this is you keep all your VAT receipts and when the house is complete you submit a self builders VAT reclaim.

To make it easy get the kitchen company to give you 2 receipts, one for the kitchen units that are eligible for VAT refund, and one for the white goods that are not.

Sigurx

Yes, but I was wanting the kitchen company to increase the price of the kitchen units ie

“Go for free white goods with your kitchen

White goods such as ovens, hobs, integral dishwashers and fridges are not eligible for VAT relief even if they are permanently built in. However, offers on kitchen units that include free white goods can leave an unofficial loophole in the collection system. Technically, the value of the white goods should be itemised on the invoice and the VAT deducted from any reclaim, as they are not really free, but this depends on the value being detailed on the paperwork, so in theory you can save the VAT.”

homebuilding.co.uk/vat-saving-tips/

00ec25

Sigurx wrote: »

Yes, but I was wanting the kitchen company to increase the price of the kitchen units ie

“Go for free white goods with your kitchen

White goods such as ovens, hobs, integral dishwashers and fridges are not eligible for VAT relief even if they are permanently built in. However, offers on kitchen units that include free white goods can leave an unofficial loophole in the collection system. Technically, the value of the white goods should be itemised on the invoice and the VAT deducted from any reclaim, as they are not really free, but this depends on the value being detailed on the paperwork, so in theory you can save the VAT.”

homebuilding.co.uk/vat-saving-tips/

in simple terms you are asking your supplier to assist you in committing VAT fraud by knowingly giving you an invoice when includes items that are specifically ineligible for a VAT refund but, as suggested by dozergirl above, because they are not itemised on the invoice and are thus "invisible" there is a chance it will not be questioned.

once you have such an invoice you will then be reclaiming the VAT applied to the kitchen "furniture" element of the invoice and as such you will be knowingly committing VAT fraud since that figure is distorted by the value of the ineligible appliances that are rolled up into the invoice's net total on which VAT has been charged.

it would work provided the supplier co-operates with you and you don't get a detailed HMRC inspection

nodosh3

Hi, this is not an answer, but a question. I am having a kitchen supplied in a new build property. How do i get the kitchen company to not charge me VAT? They say I have to pay it and claim it back. If so, how do I do that? What is the process as my understanding is if it is a new build property that is not lived in, still empty, I shoudl not have to pay VAT. Please help as I really do not want to have to pay it and then try and get it back as it is significant and I have no idea how to do that. Thank you.

Slithery

This was answered in post #6.

00ec25

nodosh3 wrote: »

Please help as I really do not want to have to pay it and then try and get it back as it is significant and I have no idea how to do that. Thank you.

well you will have to stop being lazy and DIY
clearly you have an ability to use a search function, so what is wrong with google?

https://www.gov.uk/government/publications/vat-refunds-for-diy-housebuilders-claim-form-for-new-houses-vat431nb


https://www.gov.uk/vat-building-new-home