Damp-proofing and zero rated VAT

[ziggy]

I read a post here about zero rated VAT to 'alterations' to listed buildings. Initially I thought this zero rating would apply to the damp-proofing works I'm about to undertake. Having read the hmce link kindly provided it seems damp-proofing works are specifically classed as 'maintainance' and so attract standard rate VAT. Is this always the case ? The damp-proofing works I'm doing are totally new, not a 'fix' of previous works. I think I'm stuck with standard rate VAT but thought I'd check that this is your take on it too ?

Also a second VAT question. I'm also getting the windows replaced. Currently wooden - replacing with wooden but with opening vents to help the condensation problem. The hmce link isn't clear on this - it talks about wood to upvc and vice versa but not wood to wood plus feature. The window replacements require LBC as I'm not replacing 'like for like'.

Any thoughts appreciated.

 

[skier-hughes]

For definitive advice speak to a vat specialist, you could try your local vat office, but they'll most likely read you out what's on the web :roll:

Sounds like more maintainance to me with the windows, as it's not an alteration.

Speak to your builder and see if he'll do it at zero vat, though he'll most likley want a come back clause if he gets clobbered.

Graham

 

[ziggy]

Thanks skier-hughes

I wondered if anyone here had been in the same position re damp-proofing and window VAT rating, and had a 'yes' or 'no'. I've spoken to the suppliers for both and confusion reigns, it's not something that they seem to have been asked before.

 

[AMc]

I've recently had a couple of long and unfruitful conversations with the VAT 'helpline'.
Our unlisted house was chopped into 2 over 15 years ago with the other half left unoccupied for at least that long. We're putting them back together which would seem to fall under "a change in the number of dwellings" making the VAT rate 5% not 17.5%.
First phone call agreed - when we planned on using a main contractor. Second phone call - now we plan on self building and doing a VAT reclaim - said no, it was full VAT work. When pressed on how I could get a definitive ruling I was told words to the affect that "VAT is a self certified tax and its up to the VAT registered business to apply VAT at the applicable rate HMRC will not make a decision for them" - but presumably they will if they think the VAT registered business is fiddling.

I mentioned this to one of the electricians quoting and he said as far as he was concerned a change in the number of dwellings is a 5% job, tell everyone that's the rate and they won't have a problem with it. The only issue is I can't reclaim the VAT on materials I buy directly.


It sounds to me like replacement of windows with new windows is likely to be seen as repair as you're not closing any, openings, making new ones or changing doors to windows etc. So is the damp work as you are repairing a damp wall not building a new one. But that's strictly my unprofessional opinion and you would be mad not to see if the work could actually be zero rated.

You might be able to get an opinion from a VAT consultant/accountant but at the end of the day it's the people doing the work that will need to be convinced. You may be able to offer them some indemnity if they are later told they should have charged 17.5%. The contractor doesn't get to keep the VAT so its of little interest to them to charge you more than they should unless they could be seen to be breaking the rules by deliberately underrating the work.

Something HMRC were very clear on - once you've paid VAT at 17.5% you will not be able to reclaim it from them, even if it was charged in error, only from the VAT registered company. So stictly in my own unprofessional opinion make sure you pay the lowest rate you can justify and argue the case later.

 

[Flyfisher]

I agree with AMc - you need to convince the contractors doing the work as they are the ones who must omit the VAT from their invoice.

My understanding is that alterations to listed property are zero-rated. You need LBC to alter a listed property, therefore your LBC document is 'proof' that the works are alterations. Based on this, your contractors should omit the VAT on their invoice. Give them a copy of your LBC for their files.

This is not definitive, of course, but you'll see from previous comments that the whole issue seems overly complex and even accountants, VAT specialists and the VAT people themselves don't seem to be able or willing to give simple, definitive answers.

The most important thing is to not pay the VAT in the first place, and for that you need your contractors to agree, because once paid you'll never get it back.

 

[ziggy]

Thanks for the replies. That's pretty much what I thought. I'm raising the subject with each contractor - you can but try

 

[ljn]

I am also looking into the Zero Rated VAT on listed buildings".

If you replace windows to be aesthetically appropriate for the building, it would be 0 VAT, but that is not your case. The fact that you are having to apply for listed consent could go in your favor, but Id imagine it can't see it being classed as new building works.

I understand that if you dig down, as I intend to do, to insulate my basement floor, then it can be classed as a downward extension and therefore new building works.

I don't get the re-wiring bit. Re-wiring is 17.5 %. A whole completely new electric installation, with new fuse boards, sockets and everything, And changing from Multiple occupancy to single dwelling, Somehow I hope to not pay the VAT.

Please let us know the outcome.