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Q&As
Zero rated VAT
We have planning permission for an extension and a COMPLETELY separate garage with a room above.
Is it possible that the garage and room above…which will be fully habitable as a bedroom…could be zero rated for VAT? There are no restrictions in the planning about selling this separately from the main dwelling (although we don’t intend to). We didn’t include having a small bathroom in it but as this is an internal matter can we just do it or should we have got planning for it?
Answers
From my understanding of your situation the garage would need to be attached to the main dwelling to qualify for vat reclaim. So presumably, revise the plans accordingly then providing its attached on the plan at the time of vat and build start notification you could save 20% on materials. Its also worth checking out the ability to claim for fitted items like wardrobes.
I don’t think so I am afraid. The way you have described your consent suggests that it is a garage and extension to your existing house and therefore part of your overall current dwelling. This being the case, VAT will apply to the garage construction costs as well as the extension as appropriate. To qualify for a zero rating, the garage would need to be classified in planning terms as a new dwelling, or part of a new dwelling, and then be built at the same time as that new dwelling. So, in order to qualify here you would need to make a new planning application and to turn the proposed garage structure into a separate dwelling which, if it is possible to do, could be quite lucrative?
Tim Doherty, Build It expert and MD at Dobanti Chartered Surveyors
