Get the VAT back!

Andrew Jones is a specialist in reclaiming VAT, a tax which is a tricky subject at the best of times. Here Andrew offers some brief pointers to help you on the way. You qualify for a zero-rated build IF...

• you build a new dwelling or purchase a shell and bring the new build to completion.

• You or a family member intends to live there.

• The building has no planning restrictions with regards to disposal later on; or used in connection with another existing property and may not be used as a business, sold, rented out or leased.

• You convert a previously non residential property into a dwelling or a dwelling that has been empty for 10 years or more (you would need a paper trail to prove this).

• Reduced VAT rate at source - if any VAT registered business should supply labour, or labour and materials, to the job you should pay the reduced rate of five per cent VAT.

• VAT reclaim - on completion of the build, VAT paid on qualifying materials purchased at 20% VAT can be reclaimed along with any 5% invoices.

If you pay the wrong rate of VAT to a contractor for supplying fitting or labouring this cannot be reclaimed from HMRC, irrespective of the fact HMRC has already received the VAT from the contractor. You will achieve zero rating VAT in two ways, or a combination of both

• Zero rating at source: if any VAT registered business comes and supplies labour or labour and materials to the job, you should not pay that company any VAT at all.

• VAT reclaim: on completion of the build, VAT can be reclaimed from HMRC Getting a reduced rate of VAT certificate helps you get this charged to you correctly.