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Q&As
VAT Free Demolition and Muckaway on a New Build?
Hi
I thought I would try and understand this seemingly obvious question… We are demolishing a house and building a new one. The plot is on a slope, therefore we need to dig down quite a bit to make it level. Which of these is zero-rated VAT?
1 – A groundworks team come in and demolish the house, dig out all the ground and take it away. I pay them one fee.
2 – I dig out part of the ground and get grab lorries to take it away, paying them per load.
3 – I pay a team to demolish the house, but then I pay on a load-by-load basis for them to take the muck away in grab lorries.
4 – I have a skip for the builders to use for general waste etc.
All thoughts appreciated!
Ben
One Answer
You should really direct this email to HMRC as they will be the final arbiters. However my view is the following:
1. The groundworks team, as a supply and fix contractor, are demolishing and clearing your site and reducing levels for the new build. All qualifying works for new build and thus their invoice should be zero rated.
2. If you use grab lorries and pay them yourself, they will need to charge you VAT as hired plant, skips and haulage (muck away) are not items which can be reclaimed.
3. The team demolishing the house should zero rate their invoices and if you are paying them to remove the materials then it is the same as 1 above.
4. Skips always have VAT and they cannot be reclaimed.
– Tim Doherty, Build It expert