Reclaiming VAT on Self Build - How to Claim Back the VAT for Labour and Materials on Your Self Build Project

Summary: How to claim back VAT on a self build. In most situations it is possible to claim the VAT that you have paid out for labour and materials on your self build home project. In this project we provide information and resources where you can learn all you need to know about what you can claim back VAT on and how you can do it.

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HMRC - HM Revenue and Customs

HMRC - HM Revenue and Customs

Under certain circumstances it is possible to claim the vat back on the cost of your self build.

One of the great advantages of undertaking a new build, and one of the main reasons it is so cost efficient, is the fact that materials and labour are zero rated for VAT. You will have to pay out VAT on your materials during the build but one of the most pleasant tasks of building your own home is making a VAT repayment claim once it is complete!

To make a claim, you must do this within 3 months of the building's completion (this is usually when you receive the "certificate of completion" that will be issued by your local planning authority). There are no second chances with this process as you only get one shot at it. The importance of keeping all your paper work now comes into effect as you will need to detailed information e.g. receipts etc.... The use of a spreadsheet can come in very handy in this situation. As you only get one chance you will need to get it right first time. If you miss any receipts or other cost evidence then you will have missed out.

You should not be paying out VAT on labour so scrutinise your invoices from your contractors to ensure that they are not charging you that extra 17.5% (15% after 1st December 2008, for a 13 month period).

Conversions are also zero rated but, unlike new build, you do have to pay out VAT on labour costs, although you can reclaim this at the end of the project.

The same VAT rules which apply to conversions also apply to renovations if they have been unoccupied for at least 10 years.

A 5% VAT rate applies to the renovation of dwellings which have been unoccupied for 3 years, the conversion of an existing property into multiple dwellings, the conversion of a dwelling into a care home or the conversion of a dwelling into bedsit accommodation.

You can make a claim if the new house is an ordinary private domestic residence and you will need detailed proof of VAT paid on all the goods for which a claim is to be made.

The claim must be made within three months of the building being completed and you only get one chance to claim, so you need to get it right first time.

You can make a claim for most of the goods and materials bought from a VAT registered supplier which are incorporated into the building or the site. You cannot claim for furniture, carpets, curtains, white goods, trees and plants, nor for burglar alarms, professional services such as architects fees, equipment hire, transport of materials and tools used.

HM Customs and Excise publish a very good guide on this matter. These forms can be viewed and more information obtained by clicking on the image below.

Visit the HMRC website for VAT information

Visit the HMRC website for VAT information

Some very useful links for self build information:

Useful Calculators

Special reports

Related sections

Useful links

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