VAT on New Builds, Renovations, Listed Buildings and Exports
If you are bulding a new property, renovating an old one or exporting the products that you buy from Broadleaf, you may be eligible for reduced rate VAT. There is however often confusion about which items this applies to and whether the purchase can be invoiced without VAT or whether this needs to be reclaimed directly from HMRC.
Please see below for what we hope is a simple guide:
New Builds & Renovations
New builds normally attract zero rate VAT for building materials (those items that form the fabric of the building) and renovations which convert previously uninhabited buildings into residential properties normally attract reduced 5% VAT.
Wooden floors and doors are considered by the HMRC to be building materials for this purpose.
Items which are both supplied and fitted by the same company can be invoiced at zero or reduced rate. Items which are supplied by one company and fitted by another must be invoiced at standard rate and then the VAT paid over the applicable rate reclaimed by the property owner from the HMRC through a simple process at the end of the project.
The reason for this is help prevent fraud, as the fitter can ensure that the materials are being installed into the property that is eligible for the reduced rate, whereas a supplier cannot.
For further details about which products and services are eligible for reduced rates, and who can and cannot invoice them, please see HMRC Notice 708.
Prior to March / October 2012, alterations (not repairs) to listed buildings which required and had Listed Building Consent attracted zero rate VAT. With effect from October 2012 however, this relief was abolished and all work on Listed Buildings became subject to standard rate VAT.
Some goods being exported outside the UK are eligible for zero rate VAT.
In simple terms there are goods being exported outside the EU and goods being exported within the EU to VAT registered customers.
In both cases, proof of export from the carrier is required in order for the zero rate to be applied and goods will normally attract local duty at the point of entry to their destination. If Broadleaf are responsible for the export of goods zero rate can be applied at the point of invoice. If the client is responsible for the export of the good standard rate will initially need to be charged. This will be refunded upon provision of the required documentation proving export.
Goods being exported within the EU to non VAT registered customers are subject to UK VAT at standard rate.