Comments
  • Adam

    Hi Carol,

    The rules for what is claimable in terms of VAT back and zero charging of VAT on labour are both clear and not clear at the same time.

    The HMRC sets out a lot of the rules in their publications online. For example:
    https://www.gov.uk/vat-builders/new-homes
    http://www.hmrc.gov.uk/forms/vat431nb.pdf (the reclaim forms themselves; a useful reference and way of familiarising yourself with what you will require to fill out the forms at a later date)

    There are also lots and lots of other useful resources to be found online;
    http://www.homebuilding.co.uk/advice/beginners/finance/vat
    http://www.selfbuildgroup.co.uk/First-Steps/Making-the-most-of-the-VAT-Man (and about a million other sites just like them!)

    You would be well advised to seek the advice of someone who knows the system well, especially if your build has a large budget. My first was a £175k build and I undertook the VAT reclaim paperwork myself. It was manageable and straightforward but only if you religiously keep good records. The second you put off maintaining that file it goes to pot and if you make a single error on your reclaim forms then it all goes in the bin and you get nowt. It’s harsh but ultimately fair. The taxman does warn of this fact in the smallprint!

    If you do plenty of research, discuss the zero ratings upfront with builders and suppliers and keep good records then you should be just fine. Information is power. I know someone who’s builder got it wrong and charged VAT on labour and materials. Once it’s paid it’s too late, You’ll never get it back.

    Stay alert and you’ll be fine. I tend to find the prospect of saving umpteen thousands of pounds tends to foucs the mind somewhat. Try to enjoy the whole experience. It will be worth it!

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