VAT free on building extensions?

psy · 27 November 2004 at 12:40AM

Just wondering if anyone can help me on this.

From reading previous threads, I understand new build properties are exempt from VAT.

Does anyone know if extensions to an existing property would be classified as a new build?

The reason I am asking primarily concerns grants for loft insulation. I know there are grants available, but I was told I do not qualify for an insulation grant because I am not upgrading existing insulation, but instead creating a new bulding which would need to comply with current building regs.

Boohbah · 27 November 2004 at 1:42PM

Have a look-see here;

http://www.hmce.gov.uk/channelsPortalWebApp/channelsPortalWebApp.portal?_nfpb=true&_pageLabel=pageSupport_ShowContent&id=HMCE_CL_000513&propertyType=document

N9eav · 27 November 2004 at 3:36PM

I think VAT free is on newbuilds, not extensions

psy · 28 November 2004 at 12:54AM

Thanks guys for the replies.

Boohbah - thanks for the link. I attempted to read this last week, but got too confused(!), so I e-mailed Customs & Excise for further info. They're meant to get back within 10 days, so I'll post if they give any feedback.

amd · 29 November 2004 at 12:26PM

Hi, used to do book-keeping for a building contractor!

To confirm:

VAT is re-claimable on NEW BUILD (ie complete new house), and not on extensions or refurbishings. It is paid up front and then re-claimed through the VAT system (quartely returns - you need to be registered for VAT)

However, the question of a grant is entirely a separate issue. I personally can't see a way round it if building control insist you install the insulation on completion of the building work. If they didn't, how old would the new area need to be to qualify?

Perhaps you could use the forum to ask about the cheapest insulation methods and prices. I have an interest as I'm seeing an architect this week to begin work on an extension! Maybe we should have a 'cheapest building materials' section!

N9eav · 30 November 2004 at 11:28AM

I paid a lot of contractors cash and saved the vat anyway.
e.g roof £525 saving for cash. Cash for scaffolding, shopped about for my supplies, played one off against the other. cash tool hire. I saved loads... but spent it on something else

mike_the_bike_2 · 30 November 2004 at 11:57AM

Gosh , I have never heard of people paying cash to building people to save money..what an original idea, you must be the first person to do that..thanks for the money saving tip

psy · 6 December 2004 at 11:49PM

Update:

The official reply from H.M. Customs & Excise:

"I can confirm that the builder will charge you VAT on the extension and you will be unable to reclaim any of the VAT back. The DIY house builders scheme only applies if you are constructing a new qualifying dwelling.

The only circumstance the builder could supply work zero rated is if your property is a listed building and the works carried out qualified as an approved alteration."

Worth a try anyway. Thanks for all your advice.

N9eav · 11 December 2004 at 10:10AM

Gosh , I have never heard of people paying cash to building people to save money..what an original idea, you must be the first person to do that..thanks for the money saving tip :)

Yes very funny. You will be surprised at how many reputable tradesmen will NOT do cash anymore. I guess it's getting harder to cook the books

VAT free on building extensions?

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