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Where Taxpayers and Advisers Meet

Self Build VAT Reclaim - selling a partly constructed building

overweightemon
Posts:3
Joined:Wed Feb 19, 2020 7:52 pm
Self Build VAT Reclaim - selling a partly constructed building

Postby overweightemon » Wed Feb 19, 2020 8:05 pm

Can anyone advise on the process where a self builder sells a partly completed eligible building to another self builder? How is the VAT reclaim handled in this case?

It seems that the scenario is supported as scraps of advice in the VAT manual discuss it or related concepts:

https://www.gov.uk/hmrc-internal-manuals/vat-construction/vconst24250

https://www.gov.uk/hmrc-internal-manuals/vat-construction/vconst03550

..in that the "person constructing a building" status can be transferred/acquired/inherited. I'm not really clear on the part where the vendor-selfbuilder has to wait until the purchaser-selfbuilder (ina simple chain of two people) seemingly has to wait until the building is complete - how will the vendor know, so as to not miss the 3 month deadline etc? How will the vendor provide evidence that the building has been completed (must they wait until the purchaser submits? What if the purchaser does not?

overweightemon
Posts:3
Joined:Wed Feb 19, 2020 7:52 pm

Re: Self Build VAT Reclaim - selling a partly constructed building

Postby overweightemon » Wed Feb 19, 2020 9:34 pm

Correction:
I'm not really clear on the part where the vendor-selfbuilder has to wait until the purchaser-selfbuilder (ina simple chain of two people) seemingly has to wait until the building is complete
Should say:

I'm not really clear on the part where the vendor-selfbuilder seemingly has to wait until the purchaser-selfbuilder (in a simple chain of two selfbuilders) completes the building

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

Re: Self Build VAT Reclaim - selling a partly constructed building

Postby les35 » Mon Feb 24, 2020 2:59 pm

If I were advising the builder who sold the partly completed dwelling, I would register for VAT, since the supply is zero rated, and recover VAT on materials, etc.
Given HMRC's current aggressive approach to DIY claims I suspect they would reject any attempt to claim under the scheme.


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