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Where Taxpayers and Advisers Meet

Flooring vat zero rated on new build

georgesunrite
Posts:1
Joined:Wed Mar 06, 2019 12:19 am
Flooring vat zero rated on new build

Postby georgesunrite » Wed Mar 06, 2019 12:37 am

Hi, I've reserved a new build house and the planned entry date is 15th March 2019. We were informed that if we ordered floor coverings through the house builder these would be zero rated for vat. We paid the bill for these extras a month ago and were told that the carpets would be fitted prior to the entry date but the amtico flooring would not be fitted until 15th and 16th March as a levelling screed had to be laid and left to set prior to fitting and were informed that this would not be zero rated. We cannot occupy the house until the 18th March when the removal company arrive with our furniture and belongings. Can you give some guidance on whether We qualify or not for zero rating for all floor coverings.

Many thanks

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

Re: Flooring vat zero rated on new build

Postby robbob » Wed Mar 06, 2019 9:06 am

Not my area of expertise but i will give it a go.
We paid the bill for these extras a month ago and were told that the carpets would be fitted prior to the entry date
Carpets are not eligible for zero rating (strangely neither is an integrated oven - until such time as someone challenges the vat office on this outdated view of things - surely that can only be a matter of time)
Can you give some guidance on whether We qualify or not for zero rating for all floor coverings.
I would say technically no if the construction is complete - however if you have chosen to move into the house before the building certificate of completion has been signed off you should be ok with regard to non carpet flooring.

Note you best bet is to play dumb and proceed on the basis the price you were quoted would not have vat, you may be entitled to use this argument if you were promised that no vat would be charged by the supplier.

Zero rating generally ends on completion - exemptions mentioned in 3.3.6 are relevant for your circumstance.

https://www.gov.uk/government/publications/vat-notice-708-buildings-and-construction/vat-notice-708-buildings-and-construction
3.3.2 When is construction ‘complete’?
‘Completion’ takes place at a given moment in time. That point in time is determined by weighing up the relevant factors of the project, such as:

when a Certificate of Completion is issued the accordance to approved plans and specifications the scope of the planning consent and variations to it whether the building is habitable or fit for purpose Once construction is ‘complete’, any further supplies of construction services (other than those mentioned at 3.3.6) are no longer ‘in the course of construction’ and are thus ineligible for the zero rate.
Examples:
a developer is in the process of constructing a house for sale. The house buyer, however, would like the house to include an attached conservatory and so contracts with a conservatory specialist to supply and install the conservatory prior to him moving in. The developer refuses the conservatory supplier access to the site until after he has finished his work and the house has been conveyed to the house-buyer. In such circumstances, the supply by the conservatory supplier is not work ‘in the course of the construction’ of the house but work to an existing building and cannot be zero-rated

les35
Posts:635
Joined:Wed Aug 06, 2008 3:09 pm

Re: Flooring vat zero rated on new build

Postby les35 » Wed Mar 06, 2019 1:27 pm

This is an area that HMRC are looking at at the moment. 'When is a house complete?' After a certain date all works to the house become standard rated since they are not works in the course of construction.
Carpets cannot be zero rated.
But, if the screeding and installation of flooring is done before first occupation, then you should be able to ask the contractor to zero rate.

pawncob
Posts:5090
Joined:Wed Aug 06, 2008 4:06 pm
Location:West Sussex

Re: Flooring vat zero rated on new build

Postby pawncob » Wed Mar 06, 2019 11:37 pm

Carpets are standard rated. Other flooring may be zero rated, but regardless, as you've paid for the flooring in advance you've already paid any necessary VAT.
With a pinch of salt take what I say, but don't exceed your RDA


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