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Self build Reclaim VAT

Reclaiming VAT on your self build or conversion project can save you thousands of pounds. In this article, 2020 Architects offer some guidance to assist homeowners in filing for their VAT return.

Large amounts of VAT can be lost because housebuilders are not fully aware of what they can reclaim.   You only get one chance to apply and it is difficult to rectify errors or mistakes down the line with your Self Build VAT Reclaim.

HMRC allows you to reclaim VAT that you have paid out on your project if you are:

  • building a new house
  • converting a building into a new dwelling
  • bringing an existing dwelling that has not been lived in for 10 years back in to use.

All relevant VAT invoices must be included and only one claim can be made. Vitally, your claim must also be submitted within three months of completion. You will usually get the refund within 30 working days of sending in the claim.

How Much VAT Can You Claim on Your Self build?

HMRC will not refund any VAT that has been incorrectly charged so ensure from the onset you are charged correctly.

  • The supply of materials only is always at the standard rate of VAT, which is currently 20%.
  • The supply of labour only or the joint supply of labour and materials should be at the zero rate (0%) for new builds and at the reduced rate, currently 5%, for conversions and renovations that bring a dwelling that has not been lived in for 10 years back into use as a dwelling.

Types of projects you can claim VAT back;

  • New builds. Creating a new dwelling built from scratch, providing it is to be used by you or your relatives as a family home for residential or holiday purposes.
  • Garages for use with the new dwelling and covered by planning permission at the same time.
  • Conversions that create a new dwelling. Converting a non-residential building, for instance a barn, church, business premises, into a new dwelling.
  • Renovations that bring a dwelling that has not been lived in for 10 years back into use as a dwelling.
  • If the new build or conversion is a holiday home for you and your family’s personal use.
  • Landscaping and outside works covered by your planning permission. This may include paving, fencing, turf and shrubs, and so on.

Examples of projects you cannot claim VAT back on include;

  • Extensions (e.g. granny annexe) unless built at the same time as part of a new dwelling.
  • Separate buildings that are not part of your planning permission, apart from a garage – for example a garden store.
  • Refurbishments of existing dwellings (unless empty for 10 years).
  • A new dwelling constructed for business use e.g a holiday home.

Examples of the materials you can claim VAT back;

  • All materials normally used in the build – for example, concrete, blocks, bricks, insulation, sand, cement, plaster, timber, roofing, stairs, windows, guttering, doors, paint.
  • Electrical and plumbing materials.
  • Fitted furniture such as kitchen units and worktop.
  • Extractor fans.
  • Light fittings, flooring, doors, fireplaces and fires, fixed towel rails, mirrors, solar panels, boilers, sewage treatment plants, TV aerials, curtain poles.
  • Swimming pools and saunas inside or linked to the new dwelling.

Examples of materials you cannot claim VAT back;

  • Hire of machinery
  • Paint brushes, hand tools
  • Professional fees – Architects fees or project manager fees
  • Kitchen appliances – including those integrated fridge, hob etc
  • Bedroom furniture
  • Carpets

Many purchases are made online, so ensure you retain a valid VAT invoice when buying as this may prove difficult to obtain at a later date.