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If you are building a new home or converting a non-residential building (such as a barn) into a home, you may be able to reclaim VAT on materials used under the ‘DIY Scheme’. The value of claims under this scheme can be significant.

When do I need to submit my VAT refund claim?

HM Revenue and Customs’ (HMRC) guidance states that the VAT claim must be made within 3 months of completing the work. This is generally understood to be 3 months from when a Building Regulation Completion Certificate has been granted by the local authority, but in our experience this can often be several months, if not years, after the property has been completed and occupied.

A recent VAT tribunal case has highlighted the importance of determining when a property has been completed. In this case, the owner of the newly constructed house was issued with a Council Tax certificate in June 2016. However, a Building Regulation Completion Certificate was not issued until April 2018 due to queries over some of the work.

The DIY VAT claim was then submitted in July 2018, but this was rejected by HMRC on the basis that it was outside the statutory 3 month deadline from when the building work had been completed. The tribunal agreed with HMRC’s decision and also rejected the claim.

HMRC have always looked closely at DIY VAT claims, but this case suggests that they are now looking more closely at the completion date, to ensure that the claim is made within 3 months of the property being completed. It is therefore very important to be aware of when the construction work has been completed from a VAT perspective, so that the opportunity to make a VAT claim within the 3 month window is not missed.

Speak to our experts

If you are considering building a new home or converting a barn into a residential building, don’t miss the chance to get a VAT refund. Contact Mark Dickin on mdickin@ellacotts.co.uk or 01295 250401 for more information.