Reduced VAT on renovation and extension project (VAT Notice 708)

Hi there, I'm looking for clarification on VAT Notice 708, specifically paragraph 7.3. We have 2 semi detached dwellings that we would like to knock through to create 1 single house dwelling, renovate the entire property and add an extension. My interpretation of the VAT notice is that the whole projects labour & materials would be subject to the reduced rate of 5% VAT due to the number of dwellings changing. Could you confirm this is correct? Also, do the proposed works have to take place within a certain time frame to still be eligible for the reduced rate? E.g. we plan to convert the two dwellings into one this year, but not start the renovation & extension until next year - would this still qualify? Many thanks, Ben

Hi,
If you complete building work on a single dwelling and that work changes the number of single household dwelling then the work can be at the reduced rate of VAT. You can see the guidance here:
Reduced rating the conversion of premises to a different residential use
There is no time limit to how long the conversion may take to complete, however the work would need to be carried out as a single supply/project and the builder involved would need to be satisfied that the work being carried out is in the course of the conversion.
Thank you.