VAT charged on 'preservation' builds?
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Not sure where to post this to get the best response but here is probably as good as any since some of you may possibly know about this.
I know that in the construction industry, new builds are zero VAT rated and refurbs are (usually) standard at 17.5%. However, we have a new customer who we will subcontract for that says they specialise in "preservation" builds and the VAT rate on our materials and labour sales invoices to them is to only be charged at 5%. I had a quick scan online and there is something about 5% if it's been unoccupied for more than three years. I'm also aware that this could just be an excuse to get their bill lowered even though they'll eventually reclaim any input tax.
Can I assume we would need some form of certificate from the customer to back up their claim of the alleged 5% input tax? Can I also assume that if it turned out to be a false claim that HMRC would pursue us for the difference?
Kind regards,
Robert
I know that in the construction industry, new builds are zero VAT rated and refurbs are (usually) standard at 17.5%. However, we have a new customer who we will subcontract for that says they specialise in "preservation" builds and the VAT rate on our materials and labour sales invoices to them is to only be charged at 5%. I had a quick scan online and there is something about 5% if it's been unoccupied for more than three years. I'm also aware that this could just be an excuse to get their bill lowered even though they'll eventually reclaim any input tax.
Can I assume we would need some form of certificate from the customer to back up their claim of the alleged 5% input tax? Can I also assume that if it turned out to be a false claim that HMRC would pursue us for the difference?
Kind regards,
Robert
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Comments
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Re:VAT charged on 'preservation' builds?
We've done a few of these 5% jobs and normally keep correspondence from client/architect on file regarding status.
Often the architect will have contacted HMRC in advance and received confirmation of the rate and we keep that on file.
During compliance visits these are the jobs that get most attention - so it is important to keep everything to hand.
Barn conversions are great fun. They can be 5% too - but only if they meet certain criteria.
Helen0 -
Re:VAT charged on 'preservation' builds?
Robert,
I attended a course a couple of years ago and there was a whole section on VAT land and property transactions. I still have the handout. PM your fax number and I will send it if you like.
Jan0 -
Re:VAT charged on 'preservation' builds?
Barn conversions can be zero rated, like new builds, as they are a conversion. Houses which have been unoccupied for more than 3 years (with proof) can be 5% and those unoccupied for over 10 years can be zero rated. That's how I understand it all anyway.0