I've had a call from one of my clients today regarding a new build and charging VAT. He is VAT registered
It is to demolish an existing detached house and build from scratch, no retaining walls. As far as I can ascertain, from reading VAT notice 708, is that this would classed as zero rated, including the demolition, as it would be my client doing that as an operator of the plant hire.
So my client doesn't charge VAT on any of this, but I'm confused as to the things he has to pay VAT on himself, like building materials, plant hire, and subcontractors (He mentioned a company coming in to do the rendering, and has been quoted a price + VAT)
On the materials and plant hire side I assume my client would pay the VAT and claim it back on his VAT return, is that correct?
On the subcontractor side I'm confused as to whether they should charge VAT to my client. In particular paragraph 2.1.3 of VAT notice says it can be zero rated and in paragraph 15.8 it says if note 2 is applicable then that's fine but if note 4 is applicable then it must be standard rated. Then it says if the client (I presume this means my client's customer) issues a VAT certificate, then the subcontractors supply must be standard rated. But I also read that the customer must issue a certificate anyway so I'm scratching my head.
It's just a quote at the moment, but he's said that his customer is keen, providing their are no VAT issues.
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John
Any advice given is for general guidance and professional advice should be sought applicable to your circumstances.
hi John
Ive delved into VAT on new builds before, but just now my head is far far too battered to think. Might, if you get no takers, have a wander in on Sunday when I should have a wee bit of spare time, but just wondered if its worth a chat with our Les?
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Joanne
Winner of Bookkeeper of the Year 2015, 2016 & 2017
Thoughts are my own/not to be regarded as official advice,which should be sought from a suitably qualified Accountant.
You should check out answers with reference to the legal position
Happy to help.
Since the project is the construction of a new dwelling, there is no need to issue a zero rating certificate. Sub contractors' services 'in the course of construction' are also zero rated.
In regard to the demolition of the existing structure, what is the wording of the Planning Application and Permission? Do they explicitly refer to complete demolition?
contact me on les@vatadvice.org if I can help further.
Thank you. 
