How to reclaim VAT for your new self build
If you are looking to self-build there is good news on the horizon! Did you know you may be eligible to reclaim the VAT on many of your purchases, under the government scheme VAT Refunds For DIY Housebuilders.
What self builds are eligible?
If you are building on the UK mainland, self-build projects are zero rated for VAT, which means you may be able to claim back the VAT for some of the materials used to build your house.
The build must be a new dwelling, so extensions and some annexes wouldn’t count. It also has to be for you or your family to live or holiday in and not for profit. Therefore, if you are developing it with the intention of letting it out or turning it into a business like a guest house or holiday rental property, you would not be eligible to reclaim the VAT under this scheme.
In some cases, you may be able to reclaim VAT under this scheme if you’re converting a structure that hasn’t been a residential building for at least 10 years. Or, has previously been a non-residential building, such as an agricultural barn for example. The same rules apply under these circumstances, either you or your family should be using it as their residential home or for holiday purposes.
The self build VAT reclaim process
What type of buildings are covered?
As part of your self-build you are also eligible to reclaim VAT on materials used to build a garage. Providing it is built and used at the same time as your house. You can also claim VAT back on materials used for fencing on you self-build, as long as it is permanently erected around the boundary of the property. Buildings which aren’t covered under this scheme include detached sheds, workshops, store rooms, stables, detached swimming pools and some annexes.
What happens if I use a builder or subcontractor?
If you use a builder, bricklayer, plumber or electrician they should not charge VAT when supplying and fitting. However, if they only supply an item they should charge VAT, which you can recover providing the items are included within the scheme. For example; if a plumber supplies you with a towel rail for your bathroom which you fix to the wall, you will be eligible to claim back the VAT they have charged, providing they supply you with a VAT receipt for the purchase.
What sort of items can I claim for?
Building materials have to qualify before you can claim back VAT. But working out exactly what aspects of the build fit that description can be a little tricky. The list of eligible items is long, and it’s not always obvious what’s included.
As a general rule, materials will qualify if they form an integral part of the building or can’t be removed without tools or without causing damage. But that’s obviously a very broad definition, encompassing everything from roofing beams to curtain poles.
For a new build VAT reclaim, you can claim VAT for the following items (source: HM Revenue & Customs - Goods and services you can claim for under the VAT DIY Scheme):
- Basic building materials such as bricks, timber, tiles and cement
- Air conditioning, ducted warm-air systems, extractors and filters (including cooker hoods) and any dust extracting systems (including built in vacuum cleaners)
- Builders hardware such as door furniture and rainwater goods
- Joinery items such as window and door frames
- Glass and double-glazed units
- Burglar alarms and fire alarms, including smoke detectors
- Wallpaper, paint and curtain rails
- Fitted kitchen cupboards and worktops
- Fixed floor coverings such as ceramic tiles
- Materials for installing services such as water, gas and electricity
- Plumbing and electrical installations including central heating and other fixed heaters, fires and fireplaces, bathrooms and showers
- Saunas and pools (but only if they are inside the building)
- Turf laid adjacent to your building
- Trees, shrubs and flowers if they are detailed on a landscaping scheme and are part of the planning approval
What sort of items are excluded?
- Domestic electric and gas appliances such as ovens, refrigerators and dishwashers (including all built-in items)
- Doorbells, CCTV, mirrors, lampshades and other fittings
- Electrical components for garage doors and gates, including remote controls
- Curtains and blinds (unless the blinds are integral and sealed inside the window units)
- Carpets, carpet tiles and underlay
- Aerials, satellite dishes, freeview boxes and telephones
For more information or help on what you can or cannot claim contact the UK government helpline on 0300 322 7073
How to apply for a VAT reclaim
To claim back your VAT under the VAT Refunds For DIY Housebuilders scheme, you'll need to apply to HMRC by submitting a 431NB claim form for a new build, or a 431C form for a conversion. An application must be submitted within three months of completion, but it's best to do it as soon as possible.
Things to remember that will help the VAT office check your claim
You will need to send:
- The planning permission and plans of your house
- All invoices for the materials, which you are claiming back the VAT
- Proof that you have completed the construction of your house, i.e. a certificate or letter of completion from the local authority for building regulations purposes or valuation rating for council tax assessment
Please note, you must have a VAT invoice for the eligible goods to support your claim.
Read more about the VAT Refunds For DIY Housebuilders scheme.