Another VAT Query

[MatthewC]

Apologies for again resurrecting the question of whether VAT is or is not payable.

I am putting in a driveway in front of my Grade II listed house in a conservation area. I have both planning permission and Listed Building Consent for this alteration. One of the conditions in these consents was the provision of a plan for some new trees, as the drive requires some existing trees to be felled. I have had this plan approved by the council and so am now in process of actually planning to do the work soon. I am aware of the need to have work done by a VAT registered tradesman in order to have the supply zero rated, and so I had assumed that this would apply if I got the tree nursery to plant the trees for me as well (so they are delivering a "service").

However, when reading VAT Notice 708, the bit about zero rating for alterations seems to be saying that, despite the listing applying to the whole house and curtilage, the concession for zero rating only applies to make the building itself habitable, not outbuildings. It doesn't mention driveways and landscaping, and trees are only mentioned in a section to do with new buildings.

Before I give in to the inevitable, does anyone have any experience/knowledge of doing a similar job and either paying the standard rate or being zero rated for VAT?

Matthew
(I hope I've explained that OK, but I'm feeling grumpy as I had a tooth out today)

 

[LadyArowana]

I can't help with the query, but comiserations on the tooth.

 

[Flyfisher]

Which part of 708 are you referring to Matthew?

Section 9 is the relevant one for listed (protected) buildings and as far as I can tell the zero-rating of VAT is based on alterations. There is mention of the property being, and remaining, residential but I couldn't see any requirement for the alterations being made for the purposes of making the property habitable. Indeed, I would think it's quite likely that alterations are frequently made to perfectly habitable listed properties.

I believe there are other VAT reductions when converting non-residential properties to residential use, but I think that's an entirely separate issue and applies regardless of whether or not the property is listed.

Having said that, I'm certainly no source for a definitive answer. My interpretation has been 'if it needs LBC then it's an alteration and is therefore zero-rated' and I'd proceed on that basis even though the work is not on the house itself. However you choose to proceed, it is necessary to discuss the matter with the contractors concerned and convince them to zero-rate the VAT on their invoice.

Alternatively, I suppose you could contact the VAT people and ask them directly. However, I seem to recall discussions here that suggested the VAT people will advise but cannot give a definitive ruling. So you will probably still have to convince the contractors anyway.

Not very satisfactory, I know. The one thing that does seem clear is that there is no mechanism to recover any VAT that is paid for such works, so it's essential to discuss the matter with contractors before any work is agreed.

 

[Gareth Hughes]

I doubt this will be zero-rateable as you don't actually need listed building consent for a new driveway (planning permission, yes), unless in creating it you are making alterations to either the listed building (building, not the land) or any curtilage buildings.

 

[MatthewC]

I doubt this will be zero-rateable as you don't actually need listed building consent for a new driveway (planning permission, yes), unless in creating it you are making alterations to either the listed building (building, not the land) or any curtilage buildings.

I do have LBC (as well as PP). The LBC was necessary (I think) because I had to remove a part of a boundary wall which was part of the curtilage. See photos at http://houseintheenchantedforest.blogspot.com/2011/06/enchanted-forest-is-no-more.html

Which part of 708 are you referring to Matthew?

Section 9 is the relevant one for listed (protected) buildings and as far as I can tell the zero-rating of VAT is based on alterations. There is mention of the property being, and remaining, residential but I couldn't see any requirement for the alterations being made for the purposes of making the property habitable. Indeed, I would think it's quite likely that alterations are frequently made to perfectly habitable listed properties.

Yes, Section 9. I didn't really mean "habitable", I meant "related to being able to live in the building" (I said I wasn't feeling well!). Hence their example in 9.2.3 that "the conversion of an outhouse in the curtilage of a dwelling to a swimming pool cannot be zero-rated as that building is not ‘designed to remain as or become a dwelling’ in its own right". I think my hope of not paying VAT fails at para 9.2.1 as the only "protected building" is the house itself and work on anything else is not allowable for zero rating. B****r.

... it's essential to discuss the matter with contractors before any work is agreed.

That's the stage I'm at, and I suddenly realised yesterday that 708 might not support my point of view! They are checking with their accountants and I think I'll be told that it's a lost cause...

Matthew

 

[AMc]

They are checking with their accountants and I think I'll be told that it's a lost cause...

They're the only people you have to convince - they have to apply the correct rate and it's their risk not yours - realistically they're likely to err on the side of caution and charge VAT unless its a sizeable job and you'll go elsewhere without the zero rating.

In my experience of reduced rating it was comparatively straight forward with the firms I used who were used to doing barn conversions so understood the rules and their accountants weren't phased but there were odd suppliers who wouldn't be convinced and insisted on applying the full rate.

 

[tobydog]

I've just made a major alteration and benefited hugely by being zero rated. I now need to carry out a major repair and therefore a change in the rules would be very handy. Somehow I need to get 100,000 signatures so I can lobby government!

 

[MatthewC]

I've just made a major alteration and benefited hugely by being zero rated. I now need to carry out a major repair and therefore a change in the rules would be very handy. Somehow I need to get 100,000 signatures so I can lobby government!

You've got my support - only 99,999 more!