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VAT for barn convertors

Category: Essential information March 16th, 2007 by mbc

There is an update to this post at … VAT for barn convertors update December 2007

Having been confused by the VAT treatment around barn conversions for some time, I thought I’d better get the situation clear before going any further. This is a summary of the VAT situation currently:

Conversion of a building to a residence is free of VAT paid on labour and materials.

You can reclaim the VAT paid on labour and materials without having to be VAT registered.

The relevant legislation is ‘Customs & Excise Notice 719 – VAT Refunds for DIY Home Builders and Converters‘.

A VAT registered builder should invoice you for their labour and any materials they purchase at the reduced VAT rate of 5%. This along with the full rate VAT paid on materials you have purchased can be reclaimed from your local Customs & Excise VAT office once the project has been completed. You’ll need all appropriate receipts to make the claim.

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Posted in Essential information | 9 Comments » « Leave Yours
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9 Responses

  1. g mann Says:

    how can we invoice customers at 5% vat on materials when i am charged the full 17.5% at purchase?

  2. mbc Says:

    g mann, my understanding is that a VAT registered builder can reclaim the difference in the VAT rate paid on materials and the VAT rate that is applicable in the same way as the client could.

  3. peter kendall Says:

    how does the 5% rule work for payments to kitchen and bathroom installations carried out by other contractors than the main builder

  4. mbc Says:

    peter, can’t say I’ve done it personally, but my understanding is that you would need to pay the VAT under those circumstances, then reclaim from your local Customs & Excise VAT office once the project has been completed

  5. peter kendall Says:

    thanks for the answer, do you know if it would be 5% or 17.5%?

  6. mbc Says:

    My understanding is all the VAT you’ve paid at either rate can be reclaimed in a one-off claim following completion of the conversion.

  7. Dave Alberts Says:

    I’m about to convert a barn to live in, but mean while my family and i we be living in a static on site,do we pay any council tax

    Ta very much for any replies.

    Dave

  8. 300th Post on MyBarnConversion | my barn conversion Says:

    […] pages are these: Heat Pumps: Air Source and Ground Source Super Insulation and Insulation VAT 1 and 2 Underfloor heating …and my recent series on How Much Does a Barn Conversion Cost? has […]

  9. janzbro Says:

    That a nice surprise – it even suprised the builder in the first post

    This 719 notice has now been withdrawn the new notice is VAT 431C which is a downloadable version found here
    http://customs.hmrc.gov.uk/channelsPortalWebApp/channelsPortalWebApp.portal?_nfpb=true&_pageLabel=pageVAT_ShowContent&id=HMCE_PROD1_029775&propertyType=document

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