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Where Taxpayers and Advisers Meet

VAT on New Build material and Labour

Posts: 69
Joined: Wed Aug 06, 2008 3:41 pm

VAT on New Build material and Labour

Postby 170872 » Mon Dec 16, 2019 9:58 am

Good morning all,

I been looking at VAT notice 708 and was not clear and hope someone can shade some light.

Can a land be purchased under a Limited company and when planning to develop the land as it has planning permission for an office building, can we claim the full VAT back on the cost of the building materials and labour?

Would be grateful if someone can share their thoughts

Many thanks

Trevor S
Posts: 63
Joined: Tue Jan 01, 2019 12:37 am

Re: VAT on New Build material and Labour

Postby Trevor S » Mon Dec 16, 2019 1:48 pm

Assuming that you are registered for VAT, your ability to reclaim the VAT on the works will largely be dependent on the use that you will put the completed building to - and the VAT liability of the income generated.

For example:
- Are you intending to use the building yourself? If so, what type of industry are you in - what type of supplies do you make to your customers and what do you intend to use the building for?
- Do you intend to lease or sell the building? If so, have you (or are you planning to) opt to tax it? Will the option to tax even apply? There are some circumstances where even if you do opt to tax, factors such as the nature of the other party, or source of financing, may have an impact, and prevent the sale/lease being taxable.

More detail of the arrangements would be required to offer any opinion. But remember that land and property is a particularly complex area of VAT. In such cases, it may be better to seek paid advice from a consultant who has full knowledge of the arrangements, rather than just rely on a forum - particularly if the amounts are significant.

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