The Key Points that Any Self Builder Should Know About VAT and What They are Entitled to Reclaim – Self-Build VAT Summary
One of the most satisfying parts of a self build is being able to reclaim VAT! It is a relatively simple process, but you only get one chance so it is worth understanding exactly what is required.
We go into much more details and exactly how to make your claim in our VAT for Self-build project, but here we will give you the most important points that every self builder needs to know.
Does my Self Build Qualify?
We are only talking about new builds and reclaiming VAT as a self-builder, so it is important to know what qualifies as a New Build:
“A new build is a building that has been constructed from scratch and will generally not incorporate any part of an existing building”
When you get into this definition for the purpose of reclaiming VAT a new build must be a dwelling built for you (or a relative). If it built on the site of an existing dwelling, this needs to be demolished (keeping the slab and cellar if desired). Party walls do not need to be demolished in the case of terraced or semi-detached houses (your new neighbours will be glad to hear!).
The dwelling must be separate and cannot have any restrictions on its sale or use as a separate home. The dwelling should not be part of any business scheme, although you can have a home office in your new house. This scheme is also open to conversions but the property cannot have been lived in for over 10 years.
Materials Only
You can only claim the VAT back on materials that you have purchased. It sounds obvious but if you have returned them and then been refunded or you have been credited for some other reason you cannot reclaim VAT for the simple reason that you didn’t pay it in the first place!
You cannot claim for services because the service that are eligible such as your building contractor will be ‘Zero Rated’ anyway (ie, you will not pay in the first place). Other services, such as architects and surveyors do attract VAT at the standard rate, but toy cannot reclaim this.
Top Tip – Check your contractor’s (Builder’s) invoices to ensure that they are charging the correct rate of VAT; you cannot reclaim the VAT and they only have a limited time when they can make amendments to their VAT charges.
What Materials Can I Claim?
As a simple rule, if the materials that you are claiming for cannot be removed without causing damage to them or your home, then you can claim for them.
There is a huge amount of materials that you can claim for, so it’s probably easier to focus on the ones that you can’t. White goods, furniture and furnishing can be removed without damage so they cannot be claimed. Range cookers can only be claimed if they form part of the heating or hot water system. Perhaps surprisingly carpets cannot be claimed for. The same applies for blinds, unless they are integral to a window system.
Perhaps surprisingly, you can claim for plants, trees and turf but only if they are part of the planning submission. You cannot claim for consumables used in the build, such as masking tape, white spirit.
For a much more detailed list you can see our Self Build VAT project, or if you are in any doubt the HMRC will be able to help you on the VAT refund helpline: 03000 569 145
When to Claim
You can only make one claim per dwelling, so you need to get it right, and get everything you possibly can claim for into the claim.
You have a window of 3 months to make your claim. The window will open as soon as you finish your home.
You will get an acknowledgement that you claim has been received within 5 days and the refund will be made within 6 week, if there are no queries.
What do I need to Make My Claim?
It is relatively simple to make the claim. All you need is:
- VAT431NB form completed in full
- Planning Approval including amendments and plans – to prove that your build has been approved
- Proof that you’ve finished – generally a completion certificate
- All the invoices that you are reclaiming VAT from
We provided a much fuller explanation of what is required and how to make sure that your claim goes smoothly in our VAT for self-builders project.
If you have specific questions there is a VAT Refund helpline: 03000 569 145
Good luck with the self build – we have a whole section on self building where you can finds masses of information, or you can buy Andy Patmore’s Selfbuild book.
