Green Building Forum - VAT reclaim eligibility â€“ VAT431NB and VAT notice 708

VAT reclaim eligibility â€“ VAT431NB and VAT notice 708

ward32 — Sat, 11 Apr 2015 16:49:55 +0100

My new build project started life as a large extension and renovation but has evolved in to a new build due to inadequacies in the existing structure. I currently have planning permission for an extension and complete renovation but I shall have to demolish the existing structure completely, put in deeper foundations and rebuild. So I am now in the terittory of new build, VAT reclaims etc. just when I wanted to get started. I think I need to change my planning permission to a replacement dwelling (new build) so that contractors have proof for zero rating purposes but then I read the 431NB claim form and 708 notice and saw contradictions.

I am planning to build in two stages, 'extension' part first while occupying the original building (extension part will not be connected to the original structure in any way), then demolish original structure and rebuild, making connection with the 'extension'. But in VAT notice 708 it says:
â€œA qualifying building is constructed when: it is built from scratch, and, before construction starts, any pre-existing building is demolished completely to ground levelâ€

But VAT431NB makes no mention of demolition before construction starts. It says:
â€œyour claim will not be eligible unless: you have demolished the pre-existing building to ground levelâ€

I will be demolishing the original building to ground level but not until half way through. So my questions are:
1. Could I build half the new structure before demolishing the original?
2. Other than a new build planning approval notice is there anything else a contractor needs to zero rate their services?

VAT reclaim eligibility â€“ VAT431NB and VAT notice 708

ward32 — Sat, 11 Apr 2015 16:51:27 +0100

VAT Notice 708 link:
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

Claim form VAT431NB link:
https://www.gov.uk/government/uploads/system/uploads/attachment_data/file/372661/vat431nb.pdf

VAT reclaim eligibility â€“ VAT431NB and VAT notice 708

Greenfish — Sat, 11 Apr 2015 20:14:00 +0100

HMRC are martians, you need have new building planning permission and to say that you demolished it all first even if you practically did things in a different order.

VAT reclaim eligibility â€“ VAT431NB and VAT notice 708

CWatters — Sun, 12 Apr 2015 09:32:08 +0100

I currently have planning permission for an extension and complete renovation but I shall have to demolish the existing structure completely, put in deeper foundations and rebuild. So I am now in the terittory of new build, VAT reclaims etc. just when I wanted to get started. I think I need to change my planning permission to a replacement dwelling (new build) so that contractors have proof for zero rating purposes.....

That's not the only reason you need new PP. The planners will probably insist that your existing PP does not allow you to demolish and rebuild even if the end result was identical. There may also be implications for the CIL? Self builders have an exemption but only if you apply for it before work starts (or something like that). Have you already started?

Re the difference between VAT notice 708 and VAT431NB. You should try and get that clarified in writing from the HMRC. Pretty sure they will say you have to demolish it all first. Otherwise you could build a house, reclaim the VAT and then not demolish some remaining part of the old one.

VAT reclaim eligibility â€“ VAT431NB and VAT notice 708

ward32 — Sun, 12 Apr 2015 14:02:56 +0100

Your right, my current PP does not accept demolition of the existing building but I am hoping, as nothing is changing with the new structure, I could get it amended with a Minor Change application.

I haven't started anything yet but I did have to complete the CIL exemption forms when I got PP last year.

I think I need to call the VAT help line and see how helpful they are!

VAT reclaim eligibility â€“ VAT431NB and VAT notice 708

fostertom — Sun, 12 Apr 2015 15:07:03 +0100

Get a record number of the conversation, which will be taped. I've found them surprisingly cooperative, incl giving better interpretations than the leaflets; the advice given is binding on them and you can invoke anything favourable in future by refering to the conversation no.

VAT reclaim eligibility â€“ VAT431NB and VAT notice 708

CWatters — Sun, 12 Apr 2015 17:16:11 +0100

As I recall you have to ask for that number at the start of the call.

VAT reclaim eligibility â€“ VAT431NB and VAT notice 708

an02ew — Mon, 13 Apr 2015 21:23:27 +0100

ARe you not better off starting from scratch with a complete new build in one phase? probably easier to build and you would comply with VAT rules, the VAT saving would more than pay for a short term rental.

VAT reclaim eligibility â€“ VAT431NB and VAT notice 708

djh — Fri, 17 Apr 2015 21:36:50 +0100

Posted By: ward32My new build project started life as a large extension and renovation but has evolved in to a new build due to inadequacies in the existing structure. I currently have planning permission for an extension and complete renovation but I shall have to demolish the existing structure completely, put in deeper foundations and rebuild.

Be aware that that does not fall in the scope of your existing planning permission. Make sure you get the necessary new permission BEFORE you knock down the walls, otherwise you may end up with no permission to rebuild anything at all!

I see Colin already commented on this question, but you are wrong to think it is a minor change. It is a completely different part of policy and has to meet a whole new set of criteria. Do not do anything until you have secured your new planning permission. It could be a complete showstopper.

And yes, I too think you will find it all easier and cheaper to knock it all down and start from scratch after you have permission.

VAT reclaim eligibility â€“ VAT431NB and VAT notice 708

snyggapa — Fri, 17 Apr 2015 21:59:04 +0100

if you do go for permission for a demolition and rebuild, ask on the form if it can be backdated to the original permission date - that way anything that you have bought/spent already can have the VAT claimed back. Quote section 73a of the town and country planning act... I got this magic phrase inseryed into my permission:

Planning permission is granted in accordance with the approved plans and
specifications and subject to the condition(s) set out below:

1 Notwithstanding the time limits given to implement planning permission as
prescribed by Sections 91 and 92 of the Town and Country Planning Act 1990 (as
amended), this permission (being granted under section 73A of the Act in respect of
development already carried out) shall have effect from the 8th August 2011.