VAT on new build + repairs to attached garage

by **ainaedil** on Tue Oct 04, 2011 11:15 am

We have a contract to build new house.

It will be a complete new-build house with integral Garage ( removal of existing bungalow) and planning approved and as such will be zero rated with respect to VAT.

There is a sizeable existing Garage building on site that will remain and is partially converted for ancillary use.

The owners have asked me to carry out improvements to it as they want to use it as accommodation during the new build. (live in it for a few months as the new building is being constructed)

Is it fair to say that if this work is carried out as part of the new build main contract then the improvement works to this building can be 0% VAT? ( it is not part of the planning conditions but saves them paying out on rent) as it is closely connected to the construction of the new home. ( work will be carried out 3/4 months in advance prior to the demolition and construction of the new home in March/April 2012)

Many thanks

by **section 44** on Tue Oct 04, 2011 12:35 pm

ainaedil wrote:Is it fair to say that if this work is carried out as part of the new build main contract then the improvement works to this building can be 0% VAT? (

No.

Work to the existing garage is standard-rated.

by **les35** on Wed Oct 05, 2011 8:49 am

You could argue that the work in relation to the garage is properly a 'supply in the course of the construction of a building designed as a dwelling' (Sch 8, Grp 5, Item 2).
If the cost of this aspect of the work is significant, it is worth seeking more detailed advice.