I have a client who is an electrician, he has done some work for a customer on a derelict building which the customer is making into a dwelling/living accommodation.
He has been told by the client, that all his labour and material charges should be invoiced to him at the reduced VAT rate of 5%, is this correct?
Gillian Elson
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Sounds alright
You may want to have a look at the HMRC website that relates to this :-
It can get a bit confusing but if they are converting a property into residential or a derelict property for residential use then the supplies can be at 5%.
Your client should retain sufficient evidence (plans, contract description, order description) as evidence as to why he has charged 5% on this job just in case HMRC do a VAT visit. If invoice just said "works" HMRC may have an issue, if more details given/available then no problem at all.
Yes
... provided that if the derelict building was a house, it had been empty for 3 years before the work started or is being converted into a different number of dwellings (one into two, two into one, etc.) or that it was a derelict building that had never been lived in.