Reclaim VAT on A New Build Project

Learn to Reclaim VAT on A New Build Project

09/05/2022Finance , Landlord , VAT

It has been observed that self-builders are often confused about reclaiming VAT on a newly built project. This tends to overlook the right that they can actually reclaim VAT on a new build. All they need to know before the process is navigated is what kind of projects are eligible.

Self-builders are often found occupied with bringing your homebuilding visions to life, planning, and decision making that they tend to forget to reclaim VAT. The housebuilder’s scheme by HMRC is all they need to learn before they start the process. This is important if you intend to be successful with a self-build project.

In case your project meets the eligibility criteria and you have all the required documents for claim submission, it is possible to claim 20% of the total budget. In this article, we will learn everything you need to know about reclaiming VAT.


Reclaim VAT on A New Build – The Rules

There are a few conditions and you are able to reclaim VAT under DIY Housebuiklder’s Scheme by HMRC. The conditions are:

  • If you are planning to convert an old building into a new dwelling.
  • If you plan to build a new house from scratch.
  • A dwelling back to life that was not in use for more than a decade.

A new dwelling in its own right has to be created to meet the eligibility standards. Refurbishments and extensions do not come under new dwelling projects and so they are not eligible for reclaiming VAT.


For What Projects Can I Reclaim VAT?

Normally self-builders are so occupied that they tend to overlook the rates area. For security, it is important to know the rates of VAT so that you can cross-check the rates inaccuracy factor. The cost that is linked with your project must be clearly understood by you as well.

In case of any mistake, there is no chance that you will get a refund from HMRC. Incorrectly charged VAT will be your deal to handle.

There are certain types of projects that are eligible for reclaiming VAT under the Housebuilders’ Scheme. This include the following:

  • A newly constructed building to use for business purposes.
  • A newly built or conversion of a dwelling that is used for your family’s holiday home.
  • Renovation of a dwelling that is not in use for 10 or more years.
  • Shrubs, turf, fencing, paving, or any other landscaping for outside work.
  • Conversion of an old building that is non-residency. Church, hospital, and barn come under such examples.
  • Construction of a building that is planned to build from the scratch. It is called a new dwelling. This could come from your personal use, family use, or holiday purposes. The relatives can also use this dwelling for holiday stays.
  • The use of garages and their construction as a new dwelling.


Stuck with your accounts and looking for a helping hand? How about you get our guys on a quick call. We love talking about taxes, payroll management, and any opportunities that help you expand your prospects. Call us on 02086868876 or email us today.


Final Thoughts

Finally, we can sum up the discussion as you have developed a better understanding of Reclaim VAT on A New Build. Most of the contractors get into the wrong process as they do not have enough experience and the right information to deal with new dwellings.

People are of the view that they will get the VAT in the end anyway. Leaving this process to the contractor is not a good idea. In case you are still unsure about any of the VAT aspects, it is recommended that you seek professional help. We hope this piece of information helped you to gather accurate knowledge.


Disclaimer: The information about Reclaim VAT on A New Build provided in this article is general in nature and does not intend to disregard any professional advice.

Related post

main types of taxes
What are the Main Types of Taxes in the UK?

03/03/2023tax , Tax Issues , Tax News and Tips , Tax Saving Tips , Taxation

It has been observed that the tax code in the UK is most extended since the tax year 2009. It will not be wrong to presume that tax affairs are one of the most complex matters here. This is due to the fact that the tax authorities and system is designed in a straightforward way. …

Read more
VAT on commercial vehicles
Claiming Back the VAT on Commercial Vehicles

16/01/2023tax , VAT

There are several businesses that have a clear understanding of how they can reclaim VAT on commercial vehicles. This is because the VAT input is allowed for commercial vehicles and it is blocked in the case of personal cars. However,  you must first learn to differentiate what is a commercial vehicle and how its use …

Read more