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Q&As
Should I or My Builder Claim Back VAT?
I am having a small new build home built. My builder is also managing the project.
I understand a self builder can only make one claim for VAT, so should my builder claim it back for me?
I asked him to purchase flooring and a kitchen and then invoice me. Should his invoice to me include VAT, as at this stage the suppliers will charge him VAT? Or should he invoice me net of VAT and then claim the VAT back himself?
Thank you
3 Answers
So, as long as the builder is VAT registered, they should be charging VAT at zero rate for labour and materials.
You are correct in that you can only make one claim, which is usually once the completion certificate has been issued. Though other forms of evidence that the property is completed can be submitted, 99% of self builders use the CC as the evidence. You will be making the VAT reclaim as the self builder and property owner.
In terms of the purchase of materials, there are two ways of doing this:
You have specified the materials to be used, so if he supplies and fits, then he will invoice you at zero rate. So, you could go through the build and not actually have a VAT reclaim at the end, as all the labour and specified materials would have been invoiced by your builder at the zero rate.
You will only have a claim once you start buying materials that are in your name and then these should be included in a claim and submitted to HMRC. You will then get the builder to invoice you for labour only, again at zero rate.
If your builder is not VAT registered the all the invoices need to be in your name. There will be no VAT to pay on the labour and the invoices issued in the purchasing of materials will be used and submitted to HMRC for the VAT reclaim.
Kathy Tisdale (Self Build VAT Reclaims)
Thank you.
The builder is VAT registered. I should have said that originally so can I assume it is best that all suppliers bill him and he invoices me less VAT and then he makes one claim for the VAT?
I want to keep it as simple as possible.
Could you just confirm that.
Thank you
Karen Humphreys
Hi Karen,
Apologies for the delay in coming back to you – we had a change in staffing and didn’t spot you’d asked a follow-up question.
If your builder is purchasing the materials on your behalf and installing them, then yes the simplest option from your point of view would be for your builder to invoice you at zero-rated VAT for both materials and labour. Obviously this can only apply to eligible works and materials.
The contractor will then be able to reclaim any VAT he paid on materials from HMRC in the normal way.
Many self build projects proceed in this way.
Hope this helps,
Chris