I am currently building a new house. Am I able to reclaim any of the VAT I have suffered?
In order to reclaim VAT on a new house build you must meet several conditions. Firstly, the house must be situated in the UK and you must be planning on living in the house yourself when it is completed. The building must not be intended to be used for business purposes. However, if you work from home, and you use one room as an office, then you are still permitted to make a claim for repayment of VAT. In order to qualify for a repayment of VAT it is irrelevant who actually does the building work. You can use builders or you can build the house yourself and still make a claim.
So what VAT costs can be reclaimed? The only items which qualify for VAT repayment are building materials which are acquired and used in the construction of the new building. As your house is a new building, your builder's services should be zero-rated. This means that there should be no VAT charged on their fee.
You are not able to reclaim VAT paid on any professional services, for example work carried out for you by architects or surveyors, and you are also unable to reclaim VAT paid on services such as the hire of plant, tools or equipment.
A valid claim must be submitted after the house is finished, based on the original plans. You are unable to submit an interim claim during the building process. If in doubt as to when the building is deemed to be completed, you should wait until your local planning office has issued a certificate of completion before submitting your claim for repayment.
You have to make your claim within three months of completing your building work. If you can't, you must write to HM Revenue and Customs to explain the reason for the delay.
HM Revenue and Customs should advise you that they have received your claim within ten working days and ask any questions they have about your claim at the same time. Your refund should then be issued within 30 banking days of Revenue & Customs receiving your claim.
You need to make sure that you have VAT invoices for everything you have claimed, and they must be correct. If you've been charged the wrong rate of VAT, then you can't claim a repayment. VAT invoices must show the supplier's VAT registration number, the quantity and description of the goods or services, your name and address if the value is more than £100 and the price of each item
To apply for your refund you should complete form VAT431NB. It's easier to complete the form on an ongoing basis, as the building project progresses, rather than at the very end of the project. It is therefore advisable to obtain the forms before you start the building work and document each purchase you make, on the date of purchase.
The advice in this column is specific to the facts surrounding the questions posed. Neither FPM Accountants LLP nor the contributors accept any liability for any direct or indirect loss arising from any reliance placed on replies.