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Can muck away be zero rated as part of new build?

Looking for clarification about the zero rating bulk waste removal from building sites

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We are a haulage firm and registered waste carrier that removes muck from building sites and takes for recycling/landfill. Usually the we drive up to the building site, the customer loads our wagon with the muck and we then take it away, usually to an appropriate recycling facility/quarry/landfill site that we pay for. 

Generally in the industry it is accepted that this is vatable and not covered by the new build exemptions however I have had two customers recently wanting to zero rate it and I cant find anything online to back up that it isn’t covered. 

Can anyone advise please/point me in the right direction? 

Replies (4)

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By Vile Nortin Naipaan
10th Jul 2019 12:24

Does VAT Notice 708, paragraph 3.3.4 not help?

If not, you might need a clearer definition of muck. Does your own accountant not have a view on the matter?

Thanks (1)
Replying to Vile Nortin Naipaan:
By [email protected]
10th Jul 2019 15:19

thank you - unfortunately the VAT notice is very vague on the topic. I believe the first customer that claimed to be able to zero rate was doing so on the 'site clearance' line referred to in the next reply however personally I don't think it applies.

Thanks (0)
By Wilson Philips
10th Jul 2019 12:27

VAT status applies by exclusion:

By default everything is standard-rated unless there is a specific provision that exempts it, zero-rates it or applies a reduced-rate.

if you look at the legislation and VAT Notice 708 you will note that in addition to zero-rating construction of new dwellings you can also zero-rate services closely connected with the construction, such as:

"site clearance or ‘buildersʼ clean’ services".

If you are merely carrying away the debris, rather than actually carrying out the clearing activity, I suspect that your services will not fall into that category. Your best bet would be to obtain from HMRC - if they are prepared to give you one - a written ruling on the appropriate treatment. Otherwise, in cases of doubt, always charge VAT at standard rate.

Thanks (2)
Replying to Wilson Philips:
By [email protected]
10th Jul 2019 15:24

thank you - yes it is the 'site clearance' they are relying upon and as you say, under the circumstances I don't think this applies.

Incidentally for CIS our work is usually considered to be out of scope - HMRC's guidance on this is somewhat clearer. It only applies, and we've only ever been asked to provide our CIS credentials, when we have been on site doing the excavating/digging/clearing of the debris as well as taking it away.

I know the treatment from one tax to another can be different but I have always assumed in this case that the two followed and that was why it was always Standard Rated.

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