Although the thought of building your first home might seem a daunting one, the paybacks in terms of value for money are enough to tempt even the most hesitant of self-builders. Travis Perkins aims to help you with the process of self-building as much as possible. Along with our advice on how to go about finding land and getting planning permission, we also offer guidance on how to cost your project and gain money back from the VAT man once the build is complete. So to find out how to get a VAT refund from HM Revenue and Customs, why not read on....
If you are undertaking a new build project, then all the materials and labour will be zero rated for VAT. In practice this means that you will have to pay VAT on all materials purchased for the build, but once completed, there is a time-frame in which you can claim all of this back.
It's all in the timing
As if managing the day to day pressures of a self-build aren't enough, it is well worth remembering to keep a daily track of all materials receipts and labour invoices. Although it might be tempting to file them all in a folder to deal with at the end of the project, you will only have three months from completion in which to make a VAT repayment claim. In addition, you only get 'one shot' at the claim, so any receipts or labour costs unearthed after the form has been submitted will not be counted within the repayment calculation.
So, although it isn't the highlight of a self-build project, a good bit of old-fashioned book-keeping will see you well placed for the VAT man once your certificate of completion drops through the letterbox. A simple spread sheet that tracks the date of purchase, what was bought, from whom and for how much, alongside a system of filing the original receipts and invoices will be all that is needed to ensure you do not miss out on any refund of VAT that is owed to you.
What can be claimed?
As with anything to do with HM Revenue & Customs, there are a myriad of guidance notes on what can and can't be claimed back on a self-build project. For detailed notes on the subject, why not click here for the full list of items that are and aren't included?
'Labour-free'
In brief, if you are carrying out a self-build project, then you should not be paying VAT on labour (it is worth checking the invoices as they come in from contractors to make sure that they aren't charging you VAT on top). It is worth noting here, that if you are carrying out a conversion, or renovating a property that has been unoccupied for 10 or more years, then you still have to pay VAT on all labour costs. The good news however is that this can still be reclaimed within a specified timeframe at the end of the project.
'Goods and materials VAT-free?'
You can claim the repayment of VAT on a wide range of goods and materials bought from a registered VAT supplier such as Travis Perkins. The HM Customs & Excise VAT refunds for DIY housebuilders claim form and notes for new houses gives a comprehensive list of what can and can't be included in a VAT repayment claim when building a new house, and when the building works are a conversion, you can go here for an equivalent list. For example air conditioning, fitted kitchen cupboards, burglar alarms and curtain poles can be included, but range cookers, built-in speakers, curtains and electrical components for garage doors can't.
Professional help
Finally, to tread a path through the finer points of the VAT repayment claims form, it is well worth paying for the services of a VAT consultant. With only one shot at the claim, it is money well spent. They will be well aware of all the rules and regulations surrounding any application and will help you avoid making any costly mistakes; they may well even help you to claim more than you thought possible...
