Community Infrastructure Levy (CIL)

valiant24

We've built a new house on the site of a dilapidated bungalow, which we demolished.   All good.

The county council now wants us to submit a confirmatory form for self-build relief from the CIL.   Amongst the documentation required is one of:
a.An approved claim from HM Revenue and Customs under ‘VAT431NB: VAT refunds for DIY housebuilders’
b.Proof of a specialist Self Build or Custom Build Warranty for your development
c. Proof of an approved Self Build or Custom Build Mortgage from a bank or building society for your development.

We don't have any of these!   We saved the money for the build and therefore seem to be being penalised for prudence as we didn't need a mortgage.

The planning department lady has suggested that we need to apply for a.  I mean, what a faf: the house is already complete and we are living in it so the document would for us be worthless.

We could provide the Council with all the invoices, totalling hundreds of thousands of pounds, from the builder - all zero-rated for VAT of course because every knows that this is a self-build! - but I don't know if the Council will accept this.

This must a pretty common circumstance.  Does anyone have any advice or experience to share please?

user1977

I'm not sure how commonplace it is as I expect this is a council-specific policy (and I'm not sure how common it is even to offer such a relief - my experience is of councils requiring contributions no matter what sort of "developer" it is).

Is this the same policy they had at the time you applied for planning? You might have scope for complaint if it's been introduced since then.

valiant24

user1977 said:

I'm not sure how commonplace it is as I expect this is a council-specific policy (and I'm not sure how common it is even to offer such a relief - my experience is of councils requiring contributions no matter what sort of "developer" it is).

Is this the same policy they had at the time you applied for planning? You might have scope for complaint if it's been introduced since then.

Hi, no, I don't expect they've changed it.  Many councils seem to have the same precise wording.

I hadn't thought that it might be that our council is especially generous.  I'd be surprised: we have simply replaced one house with another, so the kind of amenity that the CIL is supposed to provide -  roads etc - don't need to be added.  But you might be right.

Bookworm105

valiant24 said:

We could provide the Council with all the invoices, totalling hundreds of thousands of pounds, from the builder - all zero-rated for VAT of course because every knows that this is a self-build! - but I don't know if the Council will accept this.

that comment is akin to a chocolate teapot

No, everyone does not "know" this is a self build.
I'll take as read you did not notify the council in advance of the works starting that you were applying for CIL exemption nor did your builder? See procedure under para 54B CIL (Amendment) Regulations 2014

I take it Vat notice 708 will also be a complete surprise to you?
In order to zero rate the works, the builder is legally required to hold a certificate provided by the homeowner ("developer") attesting to the circumstances of the build. Without that certificate the builder can be liable for VAT fraud, but then since when do builders pay attention to tax!
Section 18 Buildings and construction (VAT Notice 708) - GOV.UK (www.gov.uk)

Seems to me that the council are being lenient with you by allowing you to retrospectively prove it was indeed a self build. You would be wise to comply with their request...

valiant24

Bookworm105 said:

valiant24 said:

We could provide the Council with all the invoices, totalling hundreds of thousands of pounds, from the builder - all zero-rated for VAT of course because every knows that this is a self-build! - but I don't know if the Council will accept this.

that comment is akin to a chocolate teapot

No, everyone does not "know" this is a self build.
I'll take as read you did not notify the council in advance of the works starting that you were applying for CIL exemption nor did your builder? See procedure under para 54B CIL (Amendment) Regulations 2014

I take it Vat notice 708 will also be a complete surprise to you?
In order to zero rate the works, the builder is legally required to hold a certificate provided by the homeowner ("developer") attesting to the circumstances of the build. Without that certificate the builder can be liable for VAT fraud, but then since when do builders pay attention to tax!
Section 18 Buildings and construction (VAT Notice 708) - GOV.UK (www.gov.uk)

Seems to me that the council are being lenient with you by allowing you to retrospectively prove it was indeed a self build. You would be wise to comply with their request...

Thanks for your reply.

Yes, we did notify the Council on 22/09/22 of the works, via a CIL Commencement Notice, which was duly acknowledged.

Yes, you're spot-on, I've never heard of VAT Notice 708!  The builder tells me that he didn't apply VAT under this guidance: https://www.gov.uk/vat-builders/new-homes.

I don't believe your assertion about leniency over retrospective proof is correct; the email accompanying the form they've sent me to complete says:

"As a reminder, the CIL Self Build Relief granted to you for this development is subject to you providing the Local Authority with evidence of the development being a self-build project within 6 months of the date of completion".

Bookworm105

valiant24 said:

Bookworm105 said:

valiant24 said:

We could provide the Council with all the invoices, totalling hundreds of thousands of pounds, from the builder - all zero-rated for VAT of course because every knows that this is a self-build! - but I don't know if the Council will accept this.

that comment is akin to a chocolate teapot

No, everyone does not "know" this is a self build.
I'll take as read you did not notify the council in advance of the works starting that you were applying for CIL exemption nor did your builder? See procedure under para 54B CIL (Amendment) Regulations 2014

I take it Vat notice 708 will also be a complete surprise to you?
In order to zero rate the works, the builder is legally required to hold a certificate provided by the homeowner ("developer") attesting to the circumstances of the build. Without that certificate the builder can be liable for VAT fraud, but then since when do builders pay attention to tax!
Section 18 Buildings and construction (VAT Notice 708) - GOV.UK (www.gov.uk)

Seems to me that the council are being lenient with you by allowing you to retrospectively prove it was indeed a self build. You would be wise to comply with their request...

Thanks for your reply.

Yes, we did notify the Council on 22/09/22 of the works, via a CIL Commencement Notice, which was duly acknowledged.

Yes, you're spot-on, I've never heard of VAT Notice 708!  The builder tells me that he didn't apply VAT under this guidance: https://www.gov.uk/vat-builders/new-homes.

I don't believe your assertion about leniency over retrospective proof is correct; the email accompanying the form they've sent me to complete says:

"As a reminder, the CIL Self Build Relief granted to you for this development is subject to you providing the Local Authority with evidence of the development being a self-build project within 6 months of the date of completion".

OK so they are not being lenient, they are asking you for what I said, proof of your status as explained in previous link.
As such i fail to understand your angst over providing that.

As for Vat, the link you mention is a dumbed down version of notice 708. It is thus the builder's exposure if he failed to follow its procedure and your problem that as a result he can't / won't (?) provide the necessary certificate.

valiant24

Bookworm105 said:

OK so they are not being lenient, they are asking you for what I said, proof of your status as explained in previous link.
As such i fail to understand your angst over providing that.

As for Vat, the link you mention is a dumbed down version of notice 708. It is thus the builder's exposure if he failed to follow its procedure and your problem that as a result he can't / won't (?) provide the necessary certificate.

1. Well I've completed the online HMRC form now.  Total build cost: £875,000.   Total VAT reclaimed: £0!   I haven't been charged any VAT and my objections are a) this was utterly pointless and b) they'll reject my claim because there is no VAT to be reclaimed, and the Council will reject my CIL claim on that basis.

2. I'm not sure what the builder can provide that would help.  The list of required documents was itemised in my OP, and I don't think the provider can provide any of these.

Thanks
V

valiant24

Bookworm105 said:

valiant24 said:

We could provide the Council with all the invoices, totalling hundreds of thousands of pounds, from the builder - all zero-rated for VAT of course because every knows that this is a self-build! - but I don't know if the Council will accept this.

that comment is akin to a chocolate teapot

No, everyone does not "know" this is a self build.
I'll take as read you did not notify the council in advance of the works starting that you were applying for CIL exemption nor did your builder? See procedure under para 54B CIL (Amendment) Regulations 2014

.....

Seems to me that the council are being lenient with you by allowing you to retrospectively prove it was indeed a self build. You would be wise to comply with their request...

So ... this forum was very helpful!

Upon forum advice I did submit a claim to HM Revenue and Customs under `VAT431NB: VAT refunds for DIY housebuilders'

The value of the invoices I submitted was around £900,000, but as almost all were from the contractor and absent VAT, except for a couple for external lighting, my claim for refund was about £100.   

The claim was successful, and I am £100 richer than I would have been.  Hooray for MSE!

However my Council is saying that the amount refunded is too small to prove that we funded the build ourselves, and they want other proof that it may, at its discretion, consider.   I guess they're assuming, wrongly, that the total value of invoices submitted in the claim was £100/0.2.

I believe that I have complied with the requirement and the Council, so far as I can see from reading the relevant regulations, is over-stepping its brief.  I don't want to submit additional information:
a. because it might undermine my case that I have already complied in full and
b. it's a lot of faff and I've already burned a lot of time of this

Any thoughts?
Thanks
V 

truehighlander

There is a helpful article on the Self Build website.. (if you input “CIL self build exemption if you have no self build warranty, mortgage or VAT reclaim” you will find it). It looks like a post build “self build” warranty is possibly the way out of the dilemma.. annoying for those who self build with no mortgage- but this looks to be the reality of the rules :-(