VAT reclaim on new home

VAT reclaim on new home

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I have a client who has recently built a new home himself (S/Emp builder).
He purchased part of his parents home, which consisted of a garage that was attached to their property and approximately half of their garden.
He then built on top of the garage and converted the garage itself to turn it into a new home for him and his wide to live in.
Can anyone please confirm for me that as far as they are aware, the vat reclaim can still occur (even though the garage was already standing prior to the work commencing)
Many thanks

Replies (3)

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By shaun king
19th May 2015 10:05

More information?

Is this a DIY claim or Zero rated supply by the business. What does planning permission say etc.

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By spidersong
19th May 2015 10:58

More details are needed

...but for the moment I think you may want to look at the cases of Dunlop and Smith

Dunlop:

http://www.bailii.org/uk/cases/UKFTT/TC/2014/TC04147.html 

Smith:

http://www.bailii.org/uk/cases/UKFTT/TC/2012/TC02380.html 

I haven't looked at them in detail, and with VAT the devil's in the detail, but they both deal with various aspects of a garage conversion, Dunlop won on the argument that the building wasn't a garage, and Smith lost because the building was a garage and so ineligible for the DIY scheme.

You will note Note 8 toGroup 5 of Schedule 8 (Zero rating) of the VAT Act says that a garage which has been occupied with a dwelling is excluded from being a non-residential building, so it's quite possible that what you've done here is convert a residential building to a larger residential building which would garner no relief, however as I say this is only a brief foray into the question so I haven't followed it through to the bitter end and you may find something useful in the cited cases.

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By simonhyett
19th May 2015 13:57

Thanks for the replies.

It is a DIY house builders claim form.

Unfortunately I have not seen the planning permission. I have just been passed the form by my client with next to no time to get it done!

I would guess that this would fall into more of the Smith case from above, as the building was definitely used as a garage over the years.

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