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Submit plansI want to demolish a bungalow and rebuild a new superstructure. Could VAT on goods and services in connection with the rebuild be claimed, as with a new build?
Thanks John for your question. I will send it one of our experts who will be able to clarify the situation.
Best wishes,
Elinor
Yes, potentially – but there are some important points to note. The new property needs to qualify as a new build for VAT purposes. To check the criteria, refer to VAT Notice 708 Buildings and Construction. The other major condition is that you or family members will live in the property. If you intend to let or sell the property for profit, you count as a developer and are therefore ineligible to reclaim VAT.
If you demolish an existing domestic dwelling (i.e. your bungalow) and construct a new building yourself, the project will qualify to reclaim VAT on eligible building materials under HMRC’s DIY Housebuilder’s Scheme.
The size of your VAT reclaim will depend on how hands on you are and how the works are going to be carried out. Build materials you purchase yourself – anything from local builder’s merchants to online suppliers – will be sold with 20% VAT, and it’s this VAT element that you can reclaim through the Housebuilder’s Scheme. Builders’ and trades services for a qualifying new build should be zero rated, meaning your VAT-registered contractor should not charge you any VAT on both qualifying construction materials and labour. Professional fees for people like architects, surveyors, planning consultants, engineers and scaffolders are not reclaimable under this scheme.
Kathy Tisdale, Self Build VAT Reclaims