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Empty property 5% VAT

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Hi

We have invoiced a customer for cleaning/pest control works to one of their properties. They have come back to state the building has been empty for 2 years and the invoice needs to be resubmitted to charge the VAT at 5% instead of 20%,

My view is that these works are not in related to any renovation or building works and this would be when the 5% rate is charged as opposed to it just being empty.

They will reclaim the VAT and I don't feel comfortable us billing out at the reduced rate.

Just appreciate some thoughts from those with more knowledge on this area.

Thanks

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Jason Croke
By Jason Croke
14th Sep 2021 08:58

Agree, Notice 708 section 8 refers to the renovation of empty dwellings and section 8.4 gives examples of what is and isn't eligible and clearly states that all other services not related to repair or maintenance are standard rated.
https://www.gov.uk/guidance/buildings-and-construction-vat-notice-708#pa...

Pest control may well be required to make the site safe for the workers but it is in itself, not a construction, repair or maintenance service. I would refer the customer to the above link and ask them where it indicates that you can reduce rate the supply, see what they say.

The customer is unlikely to reclaim VAT, refurbishing an empty property means if they sell it or rent it, it will be exempt supply/no right to reclaim VAT.

The customer should have been explicit when obtaining quotes at the start of the process and should have made clear the VAT rate they expected, it annoys me when customers try and argue VAT rates after the supply has been made.

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By DAVY67
14th Sep 2021 09:15

Thanks for the reply - that is very helpful.

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By DAVY67
16th Sep 2021 09:51

Turns out the actual works carried out were in relation to cleaning of balconies, albeit I still don't feel this would come under redecoration or improvements to the fabric of the dwelling where I feel the 5% is applicable?

Also, if it was applicable surely they would need to provide some form of evidence that the property had been empty as opposed to just stating the invoice is re-issued.

Thanks

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