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Housing - New Build: VAT Reclaim Process

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    • CommentAuthorborpin
    • CommentTimeFeb 24th 2015
     
    Posted By: GreenfishThe system now is clearly that a self builder can reclaim VAT on the allowable materials used for a new build but not services of any kind even builders labour. Additionally they have to ensure that "builders" zero rate both labour and materials, if not then there is no reclaim mechanism. Any work (even materials?) supplied by someone that HMRC considers professional (no legal definition of that) they must charge Standard VAT. Has it always been like that?
    I really do not know what all the fuss is about. The rules have not changed since I did my first build 17 years ago.

    It really is very simple (for a new build);
    You cannot claim for professional services i.e. anything that does not actually add to the fabric of the building.
    Any other person who is VAT registered Zero rates their labour and any materials they supply.
    All other allowable materials (incorporated into the build) on which VAT was paid, may be reclaimed.
    Plant and consumables paid for by the Self Builder cannot be reclaimed.
    • CommentAuthorGreenfish
    • CommentTimeFeb 25th 2015
     
    Posted By: borpinThe rules have not changed since I did my first build 17 years ago.
    Thanks for clearing that up. I must have misunderstood when I first looked at it, my bad.

    I can reclaim for curtain poles, yet I can not reclaim for the flat pack wardrobes that I canibalised to create built in wardrobes. Removeal would make a mess and the parts can not be repacked, but I can't see the walls from inside so they are considered furniture.

    Nick ParsonsDrill some holes in the back....

    Nice one! Just not sure HMRC knows about Ikea hacking or would see them as a materials supplier. In fact Ikea is a great source for cheap MFC, and I got their venear wardrobe doors cheaper than sheet chipboard.
    • CommentAuthorCWatters
    • CommentTimeFeb 26th 2015
     
    Makes me wonder if you can get a "professional" e.g architect, or in my situation arhaeologist, to supply zero-rateable building materials too they then have to zero-rate their services as a mixed supply. Probably not... :(


    That wouldn't work because materials are VAT rated to you.

    You need to persuade the Architect to dig the soakaway or lay a few bricks :-)
    •  
      CommentAuthordjh
    • CommentTimeMar 5th 2015
     
    Posted By: CWattersYou need to persuade the Architect to dig the soakaway or lay a few bricks :-)

    That's how design and build contracts work, isn't it? The architect is a subby to the builder, so the builder can zero-rate the architect's supply.
    • CommentAuthorSimon Still
    • CommentTimeSep 18th 2015 edited
     
    So revisiting this thread - I'm now looking at wardrobes and fitted furniture.

    As I understand it the rules on wardrobes are - 'must be able to see back wall/no more than single shelf and hanging rails'. However-

    - Could you get the supplier to split the job into basic fit and 'modifications' so the main part could be zero rated?

    - Do the VAT people ever do an onsite inspection? How would they know what the wardrobe looked like? More to the point, you can't reclaim until after completion. What happens if I've modified before making the VAT claim?

    More to the point this only seems to apply if you DIY install and claim back the VAT on the materials - presumably if you pay a joiner to build you some wardrobes and built in furniture on site they would zero rate the whole job (or are they supposed to separately invoice and charge VAT on certain items of joinery- ie can zero rate the supply and fit of doors and door frames but not wardrobes). You only submit the invoices that you're claiming back VAT on so anything zero rated is effectively invisible (and since you can't claim back VAT on labour a wardrobe fit job would have to be zero rated)
    • CommentAuthorgyrogear
    • CommentTimeSep 18th 2015
     
    The VAT incurred on delivery charges separately itemised on main invoices for eligible goods are part of the value of the goods for the purposes of the Scheme and can be refunded.

    ? 'are' ?

    gg
    •  
      CommentAuthorjoe90
    • CommentTimeSep 18th 2015
     
    It's my understanding that the wardrobes have no back, I.e. Not movable, not heard about one shelf tho. I will build my own but want bought sliding doors so those will be "built in " type doors.
    •  
      CommentAuthordjh
    • CommentTimeSep 18th 2015
     
    Posted By: Simon StillAs I understand it the rules on wardrobes are - 'must be able to see back wall/no more than single shelf and hanging rails'. However-

    AIUI, you must be able to see the ceiling as well, and it's 'hanging rail' rather than 'hanging rails' that are allowed.

    It's up to the contractor to invoice you the correct amount. Your responsibility is to not pay VAT where it isn't due, since you can't reclaim that. A contractor doing some work at different VAT rates wouldn't need multiple invoices, they just have to work out and show the correct VAT rate for each line item.

    I think the only way the VAT people would notice any errors would be if they audit the contractor's books.
  9.  
    One point that I am fairly sure is correct and can catch you out in a big way is that once BC have signed your house off you must claim your VAT back within 3 months.

    I am just looking at starting my claim.
    •  
      CommentAuthordjh
    • CommentTimeSep 18th 2015
     
    Posted By: gustyturbineOne point that I am fairly sure is correct and can catch you out in a big way is that once BC have signed your house off you must claim your VAT back within 3 months.

    Indeed, and you can't claim for anything bought after the completion cert. Mine's apparently in the post - not sure whether it's good or bad. Hopefully good. :bigsmile:

    I am just looking at starting my claim.

    I've been typing in details for the past week or so. :cry:
    One piece of good news is that they don't have to be in date order, just listed in the same order as you supply the invoices to HMRC. That was useful because I got to the end of typing them in and realized we had a few major invoices (thousands) that weren't filed and so hadn't been typed in. We misplaced them in the chaos of getting started. So all I've had to do is dig out those invoices and add them on. The pain wouldn't have been adjusting my spreadsheet, but renumbering all the physical invoices.
    • CommentAuthorborpin
    • CommentTimeSep 19th 2015
     
    From experience, it is worth checking the VAT number is on the invoice and then highlight it. Had a couple last time returned as there was no VAT number when there was.
    •  
      CommentAuthordjh
    • CommentTimeSep 19th 2015
     
    Posted By: borpinFrom experience, it is worth checking the VAT number is on the invoice and then highlight it. Had a couple last time returned as there was no VAT number when there was.

    Thanks. That sounds like a valuable contribution SWMBO can make!
    • CommentAuthorcjard
    • CommentTimeOct 11th 2015 edited
     
    swmbo is nagging me to find out about mixed invoices where some items are reclaimable and some are not.. figured someone here may know

    can anyone tell me:

    a) when an invoice contains some reclaimable (e.g. nails) and some nonreclaimable items (e.g. gloves) she puts a line through the non-rec ones then adds up all the VAT elements of the remaining items, writes the total of them on the invoice and highlights both the total and the values she's added up - is this acceptable?

    b) for an invoice altered in the way above, does it go in the "vat shown separately" part (part d) or "vat not shown separately" (parts e/f) ?

    I think it goes in part d because each line item has a separate vat element shown, but she worries it might go in part e/f because a calculation has been used to derive the vat element(s) that apply overall I.e. the vat amount is not shown separately anywhere on the invoice in its "as-prepared-by-the-supplier" state, and like other invoices of the nature "building materials - £200 inc vat@20%" the vat amount has been calculated by the applicant
    • CommentAuthorCWatters
    • CommentTimeOct 11th 2015
     
    a) I did the same on a few of my receipts. Pretty sure they don't check them all so no idea if it's acceptable or if I got lucky.

    b) I put them in the "VAT shown separately" part. I had very few in the other parts.

    Pretty sure they only have different sections because they think it somehow makes it easier for you to calculate the total VAT. I don't think they use it for any purpose themselves.

    You probably know this but they do accept spread sheets if you keep the column headings the same.
    •  
      CommentAuthordjh
    • CommentTimeOct 11th 2015
     
    I'm doing the same on my invoices, but I haven't submitted them yet, so thanks for the confirmation.

    I've got a spreadsheet with the same column headings (well, I changed 'Reference/Invoice number' to just 'Reference number' since that's what it is). How much do you think they care about it being broken into pages with running totals, and how many items on a page and so forth?
    • CommentAuthorringi
    • CommentTimeOct 12th 2015
     
    Has anyone started their own vat registered LTD to build their selfbuild?
    • CommentAuthorCWatters
    • CommentTimeOct 12th 2015
     
    <blockquote>How much do you think they care about it being broken into pages with running totals, and how many items on a page and so forth? </blockquote>

    Just had a look back at my spread sheets.

    They kept my paper copy so I can't be sure how many per page but it varied a lot as on mine the row height changes from one entry to the next depending on how long the descriptions were.

    I didn't put subtotals on each page just at the end of each "Part".
    •  
      CommentAuthordjh
    • CommentTimeOct 13th 2015
     
    Thanks, Colin.
    • CommentAuthorborpin
    • CommentTimeOct 20th 2015
     
    Posted By: ringiHas anyone started their own vat registered LTD to build their selfbuild?
    You can't. Read the VAT Notice.
    • CommentAuthorRex
    • CommentTimeOct 20th 2015
     
    I have not read all post to this thread so may be this has been covered.

    I used a red felt-tip to give each receipt/invoice its own number, starting with 1, 2, 3, etc. in the top right corner. this meant it was easy to enter the same number to the spreadsheet. Also, if not preaching the bleeding obvious, there is no need to have them in any order, just your own numerical (1, 2, 3, etc.) Exel can sort the date if necessary fro the date column.

    I had no problems with about a £2500 reclaim.
    •  
      CommentAuthordjh
    • CommentTimeOct 20th 2015
     
    That's good to know, thanks Rex.
    •  
      CommentAuthordjh
    • CommentTimeOct 22nd 2015
     
    I finally completed the paperwork and took it to the post office and ...

    they can only insure up to £2000! :cry:

    Gah! So how else to send the reclaim to the VAT man?
    • CommentAuthorcjard
    • CommentTimeOct 22nd 2015
     
    worth a trip to Newcastle? I'm going to take mine personally and get it signed for if I can...
    • CommentAuthorsnyggapa
    • CommentTimeOct 22nd 2015
     
    I'm sure I did "special delivery with consequential loss" to the value of 10k

    http://www.royalmail.com/personal/help-and-support/available-compensation-for-damaged-and-part-loss-items

    cost a few extra quid at the time - something like £10 rings a bell, just asked for it at the post office

    -Steve
    •  
      CommentAuthordjh
    • CommentTimeOct 22nd 2015
     
    Posted By: cjardworth a trip to Newcastle? I'm going to take mine personally and get it signed for if I can...

    It's a long way, though I did consider that briefly! Then I thought about delivering it to a local office, but they seem to go out of their way to hide those nowadays and I've no idea whether they would even accept it if I could find an office.

    royalmail's web site says that the man in the post office was wrong to some extent. They will do £2,500 and you can buy up to £10,000 of consequential loss cover but the site doesn't tell you how or how much. They also don't have the T&C online. Bl**dy useless website. So a bit closer but no coconut. DHL do insurance but it costs 1.5% !!! and doesn't cover consequential loss anyway, so that's no good.

    Has nobody else come across this difficulty?
    •  
      CommentAuthordjh
    • CommentTimeOct 22nd 2015
     
    Posted By: snyggapaI'm sure I did "special delivery with consequential loss" to the value of 10k

    http://www.royalmail.com/personal/help-and-support/available-compensation-for-damaged-and-part-loss-items" >http://www.royalmail.com/personal/help-and-support/available-compensation-for-damaged-and-part-loss-items

    cost a few extra quid at the time - something like £10 rings a bell, just asked for it at the post office

    -Steve

    Crossed with my post. Yes, it's the £10k compensation limit that's the problem, plus not being able to find out the details.
    • CommentAuthorCWatters
    • CommentTimeOct 22nd 2015
     
    £10K consequential loss compensation costs £9.72 extra on top of Special Delivery.

    http://www.postoffice.co.uk/mail/uk-guaranteed
    •  
      CommentAuthordjh
    • CommentTimeOct 22nd 2015
     
    Posted By: CWatters£10K consequential loss compensation costs £9.72 extra on top of Special Delivery.

    http://www.postoffice.co.uk/mail/uk-guaranteed

    Thanks Colin. Interesting that you have to look on the sales agent's website rather than the product's own site or indeed asking the agent in person!

    But the root problem is HMRC's insistence on original paper documents (which in many cases I've printed anyway since the supplier's don't provide paper copies!)

    So government (BIS) +1, private enterprise -1, government (HMRC) -1. I wonder what that says.
    • CommentAuthorCWatters
    • CommentTimeOct 23rd 2015
     
    I had a quick look to see if any other courier covers consequential loss and couldn't find any that do either. Seems odd as you can send items such as jewels worth $100,000 by FedEx if you used the right service.
    •  
      CommentAuthordjh
    • CommentTimeOct 23rd 2015
     
    Posted By: CWattersI had a quick look to see if any other courier covers consequential loss and couldn't find any that do either. Seems odd as you can send items such as jewels worth $100,000 by FedEx if you used the right service.

    I guess it's a pretty antiquated service that requires paper service today, which makes consequential loss a whole different barrel of fish.

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