In 2010 we got planning permission along with listed building consent to develop a derelict cottage and construct a rear double storey extension, along with a detatched double garage.
This was done through an existing building company sent up some years previous as it would enable us to recover the vat as the project progressed.
We thought every thing was fine although progress was slow until we had a vat inspection, this was for a
1 month period. We thought everything was fine, until we got a call then a visit from the inspector who then
gave us the news that the garage would not be exempt from vat.
The upshot is not only will we be liable for the vat on the materials but also on the labour even though that was not registered for vat.
If anyone can offer any advice.

  • Mark Brinkley

    Unfortunately, the VAT rules on listed buildings were changed during this period. Previously, alterations to listed buildings were zero-rated. Now all work on listed buildings is standard rated. You might be able to argue that the job was started before the changes and that you have a case for it to be considered under the old rules. Why the garage should be singled out and not the rest of the work I have no idea.

    As for using a builder to reclaim VAT, again there seems to be some confusion. If the builder wasn’t registered for VAT, there would be no way he could reclaim it. Instead he would have ben paying VAT on materials when purchased and passing this onto you.

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