VAT on installation and supply of a fitted study?

Client has been asked to supply and install a fiited study in a new build house.

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Will this be classed as "building materials" and zero rated or not?

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Portia profile image
By Portia Nina Levin
26th Jun 2017 10:39

My mind's buckling under the weight of all the unnecessary facts that you've provided.

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paddle steamer
By DJKL
26th Jun 2017 10:39

Has the house been finished/occupied/what stage is it?

"3.3.2 When is construction ‘complete’?
‘Completion’ takes place at a given moment in time. That point in time is determined by weighing up the relevant factors of the project, such as:

when a Certificate of Completion is issued
the accordance to approved plans and specifications
the scope of the planning consent and variations to it
whether the building is habitable or fit for purpose"

Who built house and who is instructing study is fitted?

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By 1chillibass
26th Jun 2017 11:10

Client is sub-contracting and the project is zero-rated. There services will be zero rated, we are just trying to establish whether supply and installation of a study would be classed as "furniture but not building materials" or not. Fitted kitchens are specifically mentioned in VAT notice 708 and can be classed as building materials and zero rated, as are wardrobes which can not. Just wondering if anyone had come across this question before, as a lot of new houses will have a study built in.

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Replying to 1chillibass:
paddle steamer
By DJKL
26th Jun 2017 11:49

I think you are here back to differentiating cupboards in say a recess , making walls, doors, shelves to fit say the understair space as against IKEA/Neville Russell type furniture fitted into a space, especially where there are basic carcase units and the "fitting" is mere decorative panels scribed to fit on site;, in effect if you took away the filler bits would you have a whole load of furniture carcases bolted together?

If I was going to work out a crude distinction, are the units made elsewhere, brought to site, and fitted in or are all the bits of them measured and built on site?

Appreciate this likely is not what the legislation says exactly (it is years since I had to deal with this re our projects) but it sort of gets to the nub re what is/is not furtniture.

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Portia profile image
By Portia Nina Levin
26th Jun 2017 12:29

It would be nice if there was a legal definition of "Building materials" for this purpose. It surprises me that the legislators don't think to include such things.

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Replying to Portia Nina Levin:
Portia profile image
By Portia Nina Levin
26th Jun 2017 12:42

Well bu88er me with a cucumber! There is such a definition!

Technically, HMRC's wardrobes concession doesn't meet the test of the legislation.

Here's a quick, on the fly flow chart (in words):

Q1 Are the goods being installed goods ordinarily incorporated in a dwelling?

No. Then the goods are not "building materials" and are standard-rated.

Yes. Go to Q2.

Q2. Are the goods being installed furniture or materials for the construction of furniture.

No. Go to Q4 (omitted, tests eliminating "white goods").

Yes. Go to Q3.

Q3. Are the goods furniture designed to be fitted in kitchens or materials for the construction of such furniture.

No. Then the goods are not "building materials", and are standard-rated.

Yes.Then the goods are "building materials" and can be zero-rated.

Now, I imagine the answer to Q1 is "No". However, if it's "Yes", then I think the answer to Q2 is "Yes" and the answer to Q3 is then "No".

Hard to tell from the copious information offered though.

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Replying to Portia Nina Levin:
paddle steamer
By DJKL
26th Jun 2017 12:55

Of course they did, however the difficulties on site more tended to revolve around interpreting the detail- endless hours poring over plans and elevations.At least it is not works on protected buildings which were always far more "interpretative" re what scope was approved alteration and what was not.

I am very rusty re all this (last flat construction was 1997-1999) but do vaguely recall discussions re wardrobes and how many sides of same were the fabric of the building etc (was there not a tax case or two re this) and that therefore the edifice created was not furniture.

“Building materials”, in relation to any description of building, means goods of a description ordinarily incorporated by builders in a building of that description, (or its site), but does not include—
(a)finished or prefabricated furniture, other than furniture designed to be fitted in kitchens;
(b)materials for the construction of fitted furniture, other than kitchen furniture;
(c)electrical or gas appliances, unless the appliance is an appliance which is—
(i)designed to heat space or water (or both) or to provide ventilation, air cooling, air purification, or dust extraction; or
(ii)intended for use in a building designed as a number of dwellings and is a door-entry system, a waste disposal unit or a machine for compacting waste; or
(iii)a burglar alarm, a fire alarm, or fire safety equipment or designed solely for the purpose of enabling aid to be summoned in an emergency; or
(iv)a lift or hoist;
(d)carpets or carpeting material."

http://www.legislation.gov.uk/ukpga/1994/23/schedule/8

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paddle steamer
By DJKL
26th Jun 2017 13:03

As an example, a three sided recess across the front of which is fitted sliding doors-possibly zero rate the doors, a whole load of PAX units fitted within the space, standard rate the units as furniture.

So really- depends upon design of study, 90% of time will likely be furniture but 10% of time part may be building materials.

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By shaun king
26th Jun 2017 21:14

Are we losing a sense of perspective here? They are building a study so how is that goods ordinarily installed in a dwelling, so it will be Standard rated.

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Replying to shaun king:
Portia profile image
By Portia Nina Levin
27th Jun 2017 10:30

I think you'll find that I already said that Shaun. The OP is arguing though that it is becoming increasingly common for new build dwellings to have studies in them, such that this state of affairs is the new ordinary.

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Replying to Portia Nina Levin:
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By shaun king
27th Jun 2017 11:04

Portia

I must need Specsavers or a new dictionary!!

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Replying to shaun king:
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By Portia Nina Levin
27th Jun 2017 11:06

Apparently so.

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