Get your VAT back

Two of the nicest words in the English language you will ever hear when used together: ‘tax refund’.

When you self-build or convert a property you can reclaim a substantial part of the VAT, Value Added Tax, you have paid during the process.

New builds are ‘zero-rated’. This means your builder should not charge you VAT for any work done because they can claim it back themselves later.

When building a new home you can reclaim some of the VAT paid during the process if the property meets the necessary criteria.

A brand new home on an empty plot is eligible as long as it is separate and self-contained, for you and your family to live or holiday in and not for business purposes; but you will be pleased to know that you can make one room a home office.

With conversions of existing properties the test is that it must previously have been for business-use only and a completely non-residential building. OR a residential building not lived in for more than 10 years; you must have documented proof. Conversions of buildings that cannot be sold or used separately from another building because of planning permission are NOT eligible.

The government rules say you can claim VAT back on building materials used to form part of the building that cannot be removed ‘without either using tools or damaging the building in the process’. Think fitted kitchens and wood flooring; paint, solar panels and burglar alarms.

VAT cannot be claimed back for items not permanently attached to the building itself - some electrical and gas appliances, carpets or garden ornaments.

Architects’ and surveyors’ fees and the cost of hiring machinery or equipment do not qualify.

When it comes to the claim it must be done within three months of completion and can only be done once – make sure you have claimed for everything because there is no second chance.

There are two types of forms, one for new builds, the other for conversions; you will need to supply all the necessary bills and invoices plus proofs of the work being completed. Each form comes with a guide.

Follow the rules and act promptly and it will all go smoothly or hire a professional to handle the claim for you if you know that paperwork is not your strong point.