2 Year VAT discount

Submitted by Luke Taylor on 11 February, 2010 - 10:30
in

Hello

Regarding the discount from 17.5% to 5% VAT for properties which have been empty for 2 years or more, is this applicable to building meterials for a potential owner occupier? Or is this for VAT registered developers to claim back the VAT?

I have an individual who has purchased an empty, and wished to renovate. It has been empty over 2 years. Can anyone please enlighten me as to how this discount works for individuals such as this.

 

Thank you

Flat Conversion Allowance - tax issues ›

Comment viewing options

Select your preferred way to display the comments and click "Save settings" to activate your changes.

The answer seems to be No

Submitted by admin on 11 February, 2010 - 15:28.

Hi Luke

The answer would appear to be "No", unless it has been empty for over 10 years.   I have put the relevant VAT Guidance in the Information Library. 

You may also want to look at the main VAT Guidance on Building and Construction (VAT Notice 708. Again there is a link in the Library).

Another campaigning point for NAEPP to take up!

Best wishes

David Gibbens

Daviid Gibbens (NAEPP Policy and Supoprt)

Not sure that this is correct

Submitted by JJacobs on 11 February, 2010 - 18:09.

I think what should happen here is that you, Luke, as Empty Property Officer, confirm (if you can) in writing that the property has been empty for over two years, and the owner then gives this letter to his contractor, who then charges him 5% VAT (I simply check with our Council Tax department).

 

It doesn't matter that he is going to occupy the building himself; so long as he is employing a contractor to do the renovation work, and that contractor is VAT-registered, then the reduced rate should apply.

 

I have occasionally heard that smaller contractors don't like the complications this causes and would rather walk away from the job, but I have issued many certificates and owner-occupiers have successfully obtained the reduced rate on qualifying works.

Depends who is doing the work

Submitted by admin on 11 February, 2010 - 22:15.

Hi J and L

I'm sure you are right if the owner is paying a builder - it is simply a matter of the builder charging the 5% VAT on the cost of the works.  

However, I assumed, from the reference to "building materials", that this was self-build rather than using a contractor, which is why I put the VAT rules for self-build into the library.

Other points to watch out for, if the work is being done by a contractor, are the rules around occupation ie whether or not the building is occupied when the works begin can affect the position (see Section 8.3 of VAT Notice 708).

Because of these technicalities I would never "advise" a property owner on financial issues but make him or her aware of the advice available from the HMRC.  

David Gibbens

Daviid Gibbens (NAEPP Policy and Supoprt)

VAT

Submitted by Luke Taylor on 15 February, 2010 - 15:55.

Thank you both for your reply.

 

The property was a 2 year empty, and therefore I have written a letter to the owner confirming the last date of occupation as identified through Council Tax.

I was nder the impretion that building materials could be discounted, but thanks tho your responses I ahve been able to inform the owner accordingly.

 

Again Thank you