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Where Taxpayers and Advisers Meet

zero rated vat

ambrad
Posts:2
Joined:Sun Apr 01, 2018 12:08 pm
zero rated vat

Postby ambrad » Mon Apr 02, 2018 9:20 am

hi All
We are vat registered and working on new build homes that are zero rated. Its our only contract at the moment. I would like advice on two issues that are bothering me.
My vat return figure to hmrc will be zero. Do I need to inform the hmrc of this as I will still be claiming for vat on expenses and overheads.
Also we are using two joiners from an agency. Will they still charge us vat even though we don't charge vat to the main contractor.

Hope you can help

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

Re: zero rated vat

Postby les35 » Mon Apr 02, 2018 7:16 pm

Presumably you notified HMRC when you registered for VAT as a building contractor. You do not need to tell them each time you start a new house. If you have changed trade, then you are obliged to tell them.
And do consider monthly VAT Returns, to get your VAT back quicker.

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

Re: zero rated vat

Postby robbob » Tue Apr 03, 2018 9:25 am

The main danger here is if you don't get adequate proof that zero rating applies, hmrc can be a total paint in this regard - ideally confirmation of planning consent should be kept of file and you should ensure personally that all the required conditions have been met. See 3.2 notice 708. Note in certain rare situations a certificate may be required see 14.6/14.7.

Personally i would ensure contract is worded in such a way that the customer confirms they are happy to pay any extra vat due if the zero rating does't apply for any reason beyond your control.


https://www.gov.uk/government/publications/vat-notice-708-buildings-and-construction/vat-notice-708-buildings-and-construction#zero-rating-the-construction-of-new-buildings
Also we are using two joiners from an agency. Will they still charge us vat even though we don't charge vat to the main contractor.
Probably not but this will need to be communicated to the Agency - in this regard i would possibly recommend writing confirmation from hmrc based on exact scenario.
Also we are using two joiners from an agency.
Note there are additional complications in that the work is within cis so monthly cis returns will be needed with regard to the agency payments.

There could also be additional intermediary complications depending on how the agency workers are paid and what control you have over them.


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