After a bit of advice if anyone has any experience of the following.
I have a customer I do the VAT returns for his business for. As a completely seperate entity he has just converted an old stable block within his property (knocked to the ground and rebuilt) into a dwelling, with the aim of using it to house a carer (his wife is quite ill).
He has had a builder to do the physical work, however has bought lots of fittings/furnishings and building materials for the build himself.
He has asked if he can reclaim the VAT? I know the builder will invoice at the correct rate of VAT (therefore nothing to claim) but the way I read HMRC notes I feel he should be able to claim the VAT back.
Does anyone have any experience of this - any advice would be greatly received!
Many thanks,
Lizzie
p.s although I would view it as a conversion, the planners are treating it as a newbuild, so I assume this is the form that I would complete for HMRC?
If it is a new build then the VAT can be reclaimed on purchases made by the self builder. All invoices from tradesmen, should be supplied at zero rating (But my experience of this is that a lot of tradesmen do not know this and you have to convince them). HMRC will not accept a VAT invoice from a tradesman with VAT on it, including the materials they supply).
You can only make one claim, so wait until the certicate of completion has been issued. There are some things you can't claim for (white goods, and a few other things).
When you are ready to make the claim, either fill in the form, or use an excel spreadsheet, in the same format as the form. You need to enter the transaction in the same order as they are filed (presumably to make it easy for HMRC staff to check it)
HTH
Bill
-- Edited by Wella on Wednesday 29th of June 2011 09:25:11 AM
Thats a great help - I didn't know about the Certificate of Completion, I did however see on the HMRC note that it had to be submitted within 3 months of the build.
Something that you should check, to ensure that the claim is valid - where there is a restriction on separate use or disposal of the dwelling being constructed, then the scheme cannot be used.
The statutory reference is the VAT Act 1994, Sch 8, Group 5, legal note (2)(c). "A building is designed as a dwelling or a number of dwellings where in relation to each dwelling the following conditions are satisfied ... the separate use, or disposal of the dwelling is not prohibited by the terms of any covenant, statutory planning consent or similar provision;.."
You will need to check the Planning Permission, etc., to ensure that the wording does not mean that the new dwelling can only be sold with the existign adjacent dwelling.
