This guide is about building a new home and VAT responsibilities. Find information on Value Added Tax refunds on building new homes and property conversions.
NEW BUILD VAT RECLAIM: How does VAT work on new builds?
We explain how to claim a VAT refund and which form you need for the application process.
Generally, the building work and construction materials must meet the qualifications to claim VAT.
You must also apply within three months to HM Revenue and Customs of finishing the project.
Note: A different VAT guide applies for builders working in the construction industry.
You can apply for a VAT refund on your building materials and construction services if;
The application form provides further guidance notes on what type of new building projects and materials qualify for a VAT refund.
As a general rule the home should;
Most builders are zero-rated for Value Added Tax when they are working on new buildings. That means you are unlikely to pay any VAT for their services.
As a rule, a converted building must be a non-residential property. A residential building qualifies if it has been vacant for at least 10 years. That means you can claim a refund for work carried out by builders on the conversion from a non-residential building to home.
Note: Builders usually charge a reduced VAT rate for other types of property conversion.
A VAT refund usually applies if the construction is for;
There are specific rules when you claim a VAT refund for building materials. The materials must be incorporated into the construction and removing them would cause damage. In general you should not be able to remove the materials without needing special tools to do so.
A VAT Refund is Not Available for;
There are two different forms for VAT reclaim. You should use form 431NB to claim your VAT refund on a new build. Form 431C is for claiming a VAT refund on a property conversion. The VAT refund helpline will help you with the correct return address for sending in the form.
VAT Refund Helpline
Telephone: 03000 569 145 (Monday to Friday: 9am to 4pm)
Find out about telephone call charges.
You have 3 months to claim once the building work is complete. You should get the refund within one month of sending in your claim.
Remember to include these details when you send in your claim form;
All your VAT invoices must be valid showing the correct rate to be accepted. You must convert any invoices amounts into Sterling if they are in a different currency. Contact the VAT Helpline for further aid or advice.
VAT on Building a New Home; UK Rules Updated 2017