Agricultural Addition Issue 21 AutumnWinter 2017-18 - page 2

DO IT YOURSELF HOUSE
BUILD AND VAT
If you are thinking of building a new farmhouse, it may be possible to make a claim under
the VAT DIY housebuilders scheme. Normally on purchase of a new house from say a
property developer, there is a zero rated supply and therefore no VAT is charged. This
scheme tries to put you in the same position and allows you to recover the VAT paid on
building materials from HMRC.
To be eligible the farmhouse
should be built from scratch
and not form part of an
existing building. It must be
self contained and be for
you or your family to live/
holiday in.
Farmers need to be aware
of the impact restrictions
of use may have. General
planning conditions such
as restricting the
occupation of the house
to agriculture will not affect
the VAT relief. However
planning which prevents
its separate disposal from
the surrounding agricultural
land and buildings will result
in a claim being denied.
The property must also not
be for business purposes so
furnished holiday lettings
do not qualify under the
scheme. Also the building
of a farm worker’s cottage
will not qualify but you
may be able to make a
claim under your own VAT
registration. Be aware, that
VAT incurred on:
• Services such as architect
or surveyor fees cannot
be reclaimed, if charged
separately.
Therefore you may wish
to consider a ‘design and
build’ project which then
results in one zero rated
supply.
• Plant, tools and
equipment including
plant hire costs are
denied.
• Most electrical and
gas appliances such as
agas/cookers, washing
machines, fridges and
freezers cannot be
claimed.
• Curtains, carpets,
underlay, garden
furniture, sheds and
greenhouse costs are also
excluded from a claim.
• Construction of a garage
can be included in the
claim provided it is
constructed at the same
time as your home
If using a builder/contractor,
you must ensure that they
charge you the correct
amount of VAT. If they
charge you incorrectly, you
will need to request them to
reissue the invoices as any
incorrect amount of VAT
charged cannot be claimed
back from HMRC.
If you purchase the
materials you will suffer
VAT at 20%.It is therefore
preferable, if using a
builder/contractor for them
to supply all materials as
this will also be one zero
rated supply.
You must make a claim
within 3 months of the
building work being
completed. The claim
is very detailed and all
original invoices, planning
permission, plans and
building regulation
certificate are required.
A claim is also on an invoice
basis, therefore no invoice,
no repayment. Keeping
accurate records as you
go along is the key to a
successful claim.
If you are converting a
building then there are
separate rules.
If you would like any
assistance in making
a claim, get in touch
…………. BEFORE the build
commences
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addition
agriculture
• autumn 17 • Issue 21
1 3,4,5,6,7,8
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