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Posted Thu, 17 Oct 2024 17:24:05 GMT by Duncan Clark
We're converting an abandoned building into a residence that will be our home. Most of the work is being done by a contractor, who is charging us VAT at 5%, since it is an eligible conversion. We think the project also meets the criteria of "DIY conversion", so we would like to claim back the 5% VAT when the works are complete. The official guidance page at https://www.gov.uk/guidance/vat-refunds-for-conversions-if-youre-a-diy-housebuilder explicitly says we can do this: "A builder can sometimes charge VAT at the reduced rate of 5% for their services on a conversion. If you are converting a non-residential building, you can claim the VAT charged by your builder for converting the building." However, that page links through to a more detailed guidance page at https://www.gov.uk/guidance/vat-refunds-for-new-builds-if-youre-a-diy-housebuilder#employing-a-builder-to-do-the-work which implies the reclaim may only apply to goods you have purchased directly: Employing a builder to do the work You do not need to do all, or any, of the work yourself. You can claim for eligible goods you buy and give to your builder to incorporate into the building (or its site). The work must be carried out before the date of completion. Can someone please clarify: 1) Can we claim back the 5% VAT paid to our builder for eligible building materials he has purchased to use in our conversion? For these materials we have all the original invoices (i.e. invoices made out to the contractor from suppliers, which show him paying 20%, and then him invoicing us for the costs plus 5% plus profit.) 2) Can we also claim the 5% VAT we are paying the contractor for his labour costs, profits and prelims? 3) What about eligible building materials which the contractor has sourced via a subcontractor and so we only have the invoice from the subcontractor rather than for the materials specifically – e.g. an invoice for an MVHR company for a whole system which blends the units themselves plus the cost of installation. Thanks in advance for any help!
Posted Wed, 23 Oct 2024 06:53:04 GMT by HMRC Admin 19 Response
Hi,
If you are having a property converted in to an eligible dwelling which you intend to live in then you can look at using the DIY scheme to recover the VAT incurred in the course of the conversion.
The Scheme is used to claim back the 5% VAT charged by the supplier for materials and labour costs. If you receive a supply from a subcontractor for qualifying services and materials then you can also look at reclaiming this VAT also as part of the DIY claim. Please have a careful look over the form /guidance here:
Claim a VAT refund for a conversion if you're a DIY housebuilder
VCONST24000 - DIY builders and converters VAT Refund Scheme - eligibility of claims
Thank you.

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