VAT for DIY Builders

A special VAT Refund Scheme allows DIY house-builders and people converting non residential buildings into dwellings to reclaim VAT incurred on construction or conversion costs. This scheme is available when the building will be used for a non-business purpose. CVC can advise on alternative options where a building is intended for business use.

Although builders’ services in connection with the construction of a new dwelling are likely to be zero-rated, VAT will be incurred on any materials purchased directly by the owner.

Where a building is converted zero-rating is unlikely be available and construction costs are likely to carry VAT at 5% (unless the building is listed and certain criteria are met).

Under the DIY scheme, HMRC must refund any VAT chargeable on the supply, acquisition or importation of any building materials used in connection with qualifying construction or conversion work.

The scheme can be used to reclaim VAT on eligible goods used to construct a new qualifying dwelling, communal residential building or charity building and eligible goods and services used to convert a non-residential building into a qualifying dwelling or communal residential building.

Claims must be completed and submitted within a strict time limit and this can be difficult to meet when combined with the other challenges a self-build or conversion offers.

We can compile and submit DIY claims on your behalf and deal with HM Revenue & Customs to help secure the maximum VAT refund on a given project.