VAT on partial self build

Hi, I am preparing to use a main contractor to build a pair of semi-detached houses in my garden land. We will live in one as our main residence (and rent out our existing house) and sell the other on completion. The works include demolishing an outhouse, constructing a shared driveway for the two semis and a new driveway for the existing property (all obtained on the same planning permission). My builder is unsure how to deal with the zero rate VAT element - could you please give me an overview of how he should approach this?

Hi Creative24,
If you are building two separate properties which can be sold separetely from one another then the majority of the work that a builder will charge is at the zero rate of VAT.
This should include demolition work and a driveway.
Please see the guidance below which details the conditions for the builder to be able to Zero rate the work:
Buildings and construction (VAT Notice 708) 3. Zero rating the construction of new buildings
Thank you.

 

Thanks for the guidance, both properties will now be retained as self builds for family occupation so all is clear.