We bought a new build house a year ago. The builder agreed a £2000 contribution to a gas fire and fireplace that was installed prior to completion. The builder insisted we use his supplier. The invoice was sent to the solicitor by the builder totalling £2452.00 A few days before completion our solicitor asked us for £452.00 We queried this as the net cost was £2043.33. We realised we were being charged VAT - although we had already had a discussion in the supplier's office about it being Zero rated because it was going to be installed before completion in a new build. We had to pay up as otherwise we could not complete.
I queried this with the builder because fires and fireplaces were articles 'ordinarily' incorporated in a building and should be Zero rated according to Notice 708. The builder disagreed - his reasoning was that because it was his supplier who had installed it (as opposed to his building company itself) we had to pay VAT. I don't think this can be correct because the builder paid the supplier, the builder paid the bulk of the cost and the builder arranged access etc.
I have queried this with the VAT Helpline but like any other HMRC office they don't give a concise answer. They have advised me to go to the supplier and state my case - asking the supplier to call the Helpline if they disagree. I want to be sure of my facts as it would be embarrassing to cause a fuss and eventually be proved wrong - or not right - which is a bit different.
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