VAT question

[ag_1975]

Hi.

I've just started renovating a property with a friend and intend to do it full time if the first one goes ok. The question I'm asking is how much, if any, VAT on build materials can we reclaim? I've heard different things from different people and had a look on a government site which stated property developers cannot reclaim any vat spent on materials. However, I understand that if a contractor buys the materials themselves, then they should be passing on a reduced VAT of 5% on to the developer, which would obviously be a big saving.

Can anyone let me know how true this is? Any help and advice would be greatly received.

[New Homes Expert]

Any builder registered for VAT can reclaim his VAT on his purchases which will include your materials.

However, he is required to charge you VAT on the total contract value at the current rate and pass this to HMRC.

New Build homes are VAT exempt but VAT is chargeable for any renovations, extensions etc to existing buildings.

[Jeannie D]

New Homes Expert is right to say that VAT is chargeable for renovations and extensions to existing buildings but there is one exception to that rule - listed buildings. Once you have obtained listed building consent to carry out an alteration or an extension to a listed building (and English Heritage, perhaps surprisingly, do allow such things providing they are done sympathetically and in keeping with the character and age of the property), then there is no VAT payable on the cost of the work. It's about the only tangible benefit that owners of listed buildings enjoy.

[New Homes Expert]

Thanks - I didnt know that Jeannie!

VAT is so complicated!

[Jeannie D]

I thought it was the primary purpose of every government to make it so! I only found out about listed buildings + VAT because I managed to obtain a booklet from the taxman. However, it is written in that archaic language so beloved of government departments that you have to read it about a million times to work out what it really meant to say. Keeps us on our toes, I suppose.

[New Homes Expert]

When I was VAT registered, I found I knew more about the allowances than the VAT inspector!

You could claim the VAT back on hired plant, but not if it came with a driver or something like that.

[ag_1975]

Thanks for the help, can't say I'm not a bit disappointed though