I really thought this had been put to bed last time I posted on here, but....!
The question is: for new build properties where we have supplied and installed windows and doors.
When is new build no longer classed as new and zero-rated VAT no longer applies?
We supplied and installed the windows and doors of several new build properties being constructed by a building firm - who claimed it was our responsibility to not charge them VAT. However, this did slip through the net - we charged VAT and they paid it! Some 6 months later, we are about to pay this back to them. We have - 2 months ago - have had to make some repairs due to their operatives damaging some of the parts. Now, the properties are owned occupied and effectively no longer new build or owned by the building firm.
The question then becomes, should the repairs invoice be with VAT or not?
Snagging / remedial works are usually covered but these repairs were really only caused by very heavy handed operatives, hence the need to raise an invoice. Normally the contract or our goodwill would cover any damage caused by our fitters or suppliers. However, this looked like a forced attempt. by someone who didn't know what they were doing, to open a window!
Thanks for putting the link in - I hadn't thought of doing that!
I am in no way a VAT expert but I agree with Joanne in that you should charge VAT as this seems to be a repair for damage caused by others after you had supplied and installed the windows and not a defect (however it may be classed as a defect for the main contractor)
Did you not get a handover or completion certificate to show that your works were completed?
__________________
Doug
These are only my opinions of how I see things and therefore should not be taken as advice
VAT notice 708 paras 3.3.2 and 3.3.3 appear to be the relevant points. You can bet your bottom dollar the contractor will want to treat it as snagging, but if it's not a fault caused by the original installation I would opt for it being VATable. (I'm not a VAT expert by any stretch of the imagination though.
__________________
John
Any advice given is for general guidance and professional advice should be sought applicable to your circumstances.
VAT notice 708 paras 3.3.2 and 3.3.3 appear to be the relevant points. You can bet your bottom dollar the contractor will want to treat it as snagging, but if it's not a fault caused by the original installation I would opt for it being VATable. (I'm not a VAT expert by any stretch of the imagination though.
Sort of why I asked the Q as to whether it was covered under snagging in the contract
__________________
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
Thanks for all of your expertise on this!
Interestingly enough, when I told them we couldn't remove the VAT as they were now owner / occupied and no long new build, I have heard nothing from them!! Long may it continue!
As far as Doug's comment "Did you not get a handover or completion certificate to show that your works were completed?" - we don't tend to issue this sort of paperwork, although I think we possibly should think about it.
The main bulk of our installations are usually domestic householders doing home improvements and 99% of customers won't pay until they have thoroughly checked out the work and are entitled to retain monies until everything is completed to their satisfaction.
It is always good to hear how others think about fairly little problems that always seem to expand into big problems when you have no one to discuss with!!
r-vat-exempt-certificate/
