If you build your own house or convert an existing property into a home, you may be eligible to apply for a VAT refund on building materials and services. You do not need to be VAT registered to claim a refund.

what qualifies?

Refunds can be claimed in respect of building materials that are incorporated into the building and which cannot be removed without tools or without damaging the building. Refunds are available for materials used to build both new homes and for certain conversions.

A new home will qualify if it is separate and self-contained and you build it for you and your family to live in. The property must not be used for business purposes, although you are permitted to use one room as a home office.

Conversions will qualify if the property was previously used for non-residential purposes and is converted for residential use. Conversions of residential building will only qualify if they have not been lived in for at least 10 years.

Where you use a builder, the builder’s services will normally be zero-rated where they work on a new home. However, you can claim a refund for VAT charged by a builder working on a conversion.

what does not qualify?

Refunds are not available in respect of:

• materials or services on which no VAT is payable because they are zero-rated or exempt;
• professional fees, such as architects’ fees or surveyors’ fees;
• costs of hiring machinery or equipment;
• building materials which are not permanently attached to or part of the building;
• fitted furniture, some gas and electrical appliances, carpets and garden ornaments.

A refund is also denied if the building is not capable of being sold separately, for example, as a result of planning restrictions.

how to claim

The claim is made on form 431NB where it relates to a new build and on form 431 where it relates to a conversion. The forms are available on the Gov.uk website. The claim must be made within three months of the date on which the building work was completed.

You must include all the relevant supporting documentation with your claim, such as valid VAT invoices to support the amount claimed. The refund will normally be issued within 30 days of making the claim.

Link: www.gov.uk/vat-building-new-home/eligibility.

Drafting an application for a VAT refund on a new build property or conversion can be a lengthy and time consuming process, which is why we are here to help. If you are considering making a claim, then please get in touch or if you are not already a client by visiting our website and completing our enquiry form below and we would be happy to provide you with a no obligation, fixed fee quote, and in doing so hopefully will save you time and remove the stress, so you can concentrate on enjoying your lovely new home with your family.

get in touch