VAT paid on materials for renovation

Hi, I am a landlord with a single property rented out. The property is a houseboat. Recently, I had to undertake a large amount of work to renovate the structure of the boat. I have paid VAT on materials and labour from the workmen. When submitting a claim to the insurance, they stated that they would not refund VAT as I was able to do that direct from HMRC. Is this correct, or is there a misunderstanding? Thanks for any advice.

Hi "D712GB
If you are VAT registered for the purposes of renting out the houseboat then the insurance company would be correct in only paying out the net amount and you would claim the VAT element on your VAT return.
However if you are not VAT registered then the insurance company should be paying you the gross value.
Please see below, section 5.1.1
VAT and particular supplies of insurance
Thank you. 
 

Thank you for your response. Having spoken further with the insurer, they state that the reason for not covering the VAT costs are: " VAT exemption being a residential houseboat without inbuilt propulsion. Please find the following link to the HMRC website page: https://www.gov.uk/guidance/vat-treatment-of-caravans-and-houseboats-notice-70120#section7" Having paid VAT on the materials and labour, does this mean I should not have done? Thank you for your continued support.

Hi,

If you VAT registered you are and able to recover the VAT and so the insurance company would be correct in refusing to pay the VAT.

If you are not VAT registered then the only means you have of recovering the VAT would be through the insurance company.

Thank you.