You can apply for a VAT refund on building materials and services if you’re:
- building a new home
- converting a property into a home
- building a non-profit communal residence – eg a hospice
- building a property for a charity
The building work and materials have to qualify and you must apply to HM Revenue and Customs (HMRC) within 3 months of completing the work.
The application form has guidance on what building projects and materials qualify for a VAT refund. The basics are listed below.
New homes The home must:
- be separate and self-contained
- be for you or your family to live or holiday in
- not be for business purposes (you can use one room as a work from home office)
Builders working on new buildings should be zero rated anyway and you won’t pay any VAT on their services.
The building being converted must usually be a non-residential building. Residential buildings qualify if they haven’t been lived in for at least 10 years.
You may claim a refund for builders work on a conversion of non-residential building into home.
For other conversions builders can charge a reduced VAT rate.
Communal and charity buildings
You may get a VAT refund if the building is for 1 of the following purposes:
- non-business – you can’t charge a fee for the use of the building
- charitable, eg a hospice
- residential, eg a children’s home
You may claim a VAT refund for building materials that are incorporated into the building and can’t be removed without tools or damaging the building.
What doesn’t qualify
You can’t get a VAT refund for:
- building projects in the Channel Islands
- materials or services that don’t have any VAT – eg they were zero-rated or exempt
- professional or supervisory fees – eg architects, surveyors
- hiring machinery or equipment
- buildings for business purposes
- buildings that can’t be sold or used separately from another property because of a planning permission condition
- building materials that aren’t permanently attached to or part of the building itself
- fitted furniture, some electrical and gas appliances, carpets or garden ornaments.
How to claim
Fill in form 431NB to claim a VAT refund on a new build, or 431C to claim for a conversion.
Call the VAT refund helpline to find out where to send the form. VAT refund helpline Telephone: 03000 569 145 Monday to Friday, 9am to 4pm.
What you need to know
You must claim within 3 months of the building work being completed.
You’ll usually get the refund in 30 working days of sending the claim.
You must include the following with your claim:
- bank details – so the refund can be paid
- the planning permission
- proof the building work is finished – eg a letter from your local authority
- a full set of building plans
- the invoices – including tenders or estimations if the invoice isn’t itemised
- bills and any credit notes VAT invoices must be valid and show the correct rate of VAT or they won’t be accepted. For invoices not in Sterling, convert the amounts into Sterling.