VAT FOR CONVERSIONS
Planning on undertaking work to turn a non-residential building into a home? Save money with our guide to navigating the VAT rules for conversion projects
RORY GARDINER
Before you embark on converting a building into a house, it makes good financial sense to get to grips with the basics on VAT rules for this type of project. Under VAT431C, VAT refunds for DIY housebuilders, you can reclaim the VAT you pay on a labour and qualifying building materials that go into your conversion project. But the rules can be a little confusing – involving paying two different rates upfront, before reclaiming both from HMRC later on.
Eligibility
The first thing you need to do, is work out whether or not your project qualifies for the VAT reclaim scheme. “The building must not have any planning restrictions with regards to its disposal (sale) or in relation to its use in connection with another existing proper ty, and may not be used as a business, sold, rented or leased,” says Andrew Jones of Andrew Jones, The VATman (www.vat431.co. uk). If you have purchased a completed conversion from a developer or builder, you will not be able to claim for fur ther work – adding a conser vator y, for example.