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Where Taxpayers and Advisers Meet

VAT on new build houses

Jambo55
Posts:131
Joined:Wed Jun 23, 2010 5:54 pm
VAT on new build houses

Postby Jambo55 » Tue Sep 25, 2018 10:29 am

Hi all,

If a decorator is supplying and installing wall paper, skirting boards, etc into a new build property, am I correct in thinking that in addition to the labour charge being 0% the charge for the materials is also at 0% (as the decorator is certain the property is a new build and they are physically working on site)- am I correct in my thinking here? Thank you JmB

robbob
Posts:3228
Joined:Wed Aug 06, 2008 4:01 pm

Re: VAT on new build houses

Postby robbob » Tue Sep 25, 2018 12:27 pm

Normally the goods follow the same vat treatment as the supply providing we are talking about qualifying "building materials" so i would expect the supply to be zero rated unless the definition of building materials in notice 708 section 13.3 is not met. There are however plenty of oddities in section 13.3 for example integrated cookers do not qualify as hmrc do not think these are NOT normally provided in newbuild house - if ever a rule needs to be challenged and updated that would be no 1 on my list - also it looks like blinds are excluded. HMRC must be living in an episode of how they used to live - by eck even the houses in Beamish have curtains :)




https://www.gov.uk/government/publications/vat-notice-708-buildings-and-construction/vat-notice-708-buildings-and-construction#supplies-of-building-materials-by-contractors

11.2 Goods ‘incorporated’ by a builder
If you are a builder, the rate of VAT you charge for your work normally determines the rate of VAT you charge on any goods you ‘incorporate’ in the building (or its site) - see paragraph 13.3 - whilst carrying out that work. So, if your work is zero-rated or reduced-rated, then so are the goods.

Please note, however, that this is only the case where the goods that you are incorporating into the building are ‘building materials’. Section 13 explains what goods are ‘building materials’.

Jambo55
Posts:131
Joined:Wed Jun 23, 2010 5:54 pm

Re: VAT on new build houses

Postby Jambo55 » Tue Sep 25, 2018 12:56 pm

Robob - thank you very much, thats a great response


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