05 Jul Building a New Home & VAT

Overview

You can apply for a VAT refund on building materials and services if you’re:

• building a new home
• converting a property into a home
• building a non-profit communal residence – eg a hospice
• building a property for a charity

The building work and materials have to qualify and you must apply to HM Revenue and Customs (HMRC) within 3 months of completing the work.

Eligibility

The application form has guidance on what building projects and materials qualify for a VAT refund. The basics are listed below.

New homes

The home must:

• be separate and self-contained
• be for you or your family to live or holiday in
• not be for business purposes (you can use one room as a work from home office)

Builders working on new buildings should be zero-rated anyway and you won’t pay any VAT on their services.

The supply of architectural, surveying, consultancy and supervisory services is always standard-rated.

Conversions

The building being converted must usually be a non-residential building. Residential buildings qualify if they haven’t been lived in for at least 10 years.

You may claim a refund for builders’ work on a conversion of non-residential building into a home.

For other conversions builders can charge a reduced VAT rate.

Communal and charity buildings

You may get a VAT refund if the building is for one of the following purposes:

• non-business – you can’t charge a fee for the use of the building
• charitable, for example a hospice
• residential, for example a children’s home

Building materials

You may claim a VAT refund for building materials that are incorporated into the building and can’t be removed without tools or damaging the building.

What doesn’t qualify

You can’t get a VAT refund for:

• building projects in the Channel Islands
• materials or services that don’t have any VAT – for example, they were zero-rated or exempt
• professional or supervisory fees – for example, architects or surveyors
• hiring machinery or equipment
• buildings for business purposes
• buildings that can’t be sold or used separately from another property because of a planning permission condition
• building materials that aren’t permanently attached to or part of the building itself
• fitted furniture, some electrical and gas appliances, carpets or garden ornaments

How to claim

Fill in form 431NB to claim a VAT refund on a new build, or 431C to claim for a conversion.

Send your claim form to HM Revenue and Customs (HMRC).

National DIY Team SO970
HM Revenue and Customs
Newcastle
NE98 1ZZ

You must claim within 3 months of the building work being completed.

What you need to include

You must include all the documents listed in the claim form as part of your application.

If an invoice is in your business’s name, you’ll need proof that you’ve refunded the amount from your personal bank – for example, a bank statement.

VAT invoices must be valid and show the correct rate of VAT or they won’t be accepted. For invoices not in sterling, convert the amounts into sterling.

How long it takes

You’ll usually get the refund within 30 working days of sending the claim.

Help with VAT

Please get in touch if you need any help.