Can a ‘DIY housebuilder’ reclaim VAT spent on materials used to build their home, despite that as individuals they are not VAT registered?
The answer is a categorical YES you can, providing you follow all the relevant processes, keep VAT receipts as evidence, and make your claim within the agreed timeframe.
In this short article we will answer the questions we are asked most regularly by home builders on the subject of reclaiming input VAT:
What is the DIY Housebuilder Scheme?
The DIY Housebuilder scheme is an approved HMRC scheme, which allows individual housebuilders and converters to reclaim input VAT on specific types of building projects.
What sort of projects are included?
The DIY Housebuilders’ scheme covers the building of the following:
- new homes
- communal residences such as hospices or children’s homes
- properties for charities such as social housing or hospices, as well as
- the conversion of a non-residential property into a home, providing it it not currently a residential property, or if it is, that it has not been lived in for at least ten years.
Provided that they fulfil the following criteria:
- that the home is separate and self contained
- that it is for the individual or their family to holiday or to live in
- that it is not to be used for business purposes
What if you genuinely do work from home?
If you work from home, you still might be able to take advantage of the DIY housebuilders’ scheme, provided that you don’t use more than one room for your work from home office
What if I have a builder to do the work for me?
You don’t have to actually physically complete the build yourself in order to take advantage of the scheme. If you contract with a builder to do the work on your new home, their work should be zero rated for VAT, and therefore there will be no VAT on their invoices to reclaim.
If you have a builder convert a non residential building into a home for you, there may be VAT on their invoices, which you should be able to reclaim under the scheme.
What sorts of goods and services can you reclaim input VAT on?
You may be able to reclaim the VAT on building materials used in your self build property, however any services should be zero rated when relating to new build properties, therefore VAT on services can only be claimed for work on qualifying conversions.
The other goods which tend to be excluded are those which have more of a ‘luxury’ feel, rather than being a necessity, such as artificial grass, awnings and audio-visual equipment, through to tile cutters, toilet hire and white goods…
HMRC has a published list of goods and services which you can and cannot claim for under the VAT DIY Housebuilder scheme, which you can find HERE
How and when do I actually make a claim?
In order to make your claim you will need to complete a VAT431NB claim form for new houses, which you can access HERE
You will need to complete the form, print it off and send by post (so much for digital tax!!!) to HMRC’s National DIY Team within three months of the building work being completed.
You will also need to include ALL of the following with your claim:
- all original invoices (not copies) addresses to you personally
- a full set of building plans
- full planning permission, or your ‘Outline Planning Permission’ with your ‘Approval of Reserved Matters’ documentation
- your Building Regulation Completion Certificate
- If you don’t have this certificate, please see the form for other acceptable evidence to be included
What if I can’t find an invoice, or I find it after I have sent my claim in?
Any additional invoices sent after a claim has been submitted will be rejected, so it is essential to ensure you include everything relevant with your application.
We understand that HMRC are getting more aggressive when reviewing these claims at present, and therefore it is essential to provide the correct, original VAT invoices and other documentation to support your claim, or risk it being challenged and potentially fully rejected.
If you have any questions regarding your DIY housebuilders’ VAT scheme claim, please do not hesitate to contact us and we will be very happy to help ????