New Build Property - VAT Zero Rated Question

Providing Project / Site Management for Company New Build Project

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I am working with a client who employs staff and has been asked to provide Project Managers / Site Managers and other functions as part of a New Build Housing Project that they are working on.  They are providing these on a month by month basis to the Construction Company who are building the new houses.

The question I have is that when the client is raising invoices to the Construction Company as this is for a New Build Programme which qualifies for VAT Zero Rated does the client raise VAT or Non VAT invoices to the Construction Company?  If they are to not raise VAT invoices they what evidence is required for the client to be held on file in the event of a VAT Audit.

Any steers appreciated.

 

Replies (7)

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RLI
By lionofludesch
15th Aug 2018 16:14

Residential housing, newly built, is zero rated, not exempt.

There's a huge difference.

It depends - exactly what do these people do ?

"Project Managers/Site Managers and other functions" is a bit vague.

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Replying to lionofludesch:
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By Danny_C
15th Aug 2018 16:18

Thanks

Bit vague on what the client is asking me so just clarified

They have now said they will be specifically Project Managing the New Build Programme across multiple sites, the Site Managers will be delivering their individual sites. Other functions will be purchasing materials on behalf of the client?

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Replying to Danny_C:
RLI
By lionofludesch
15th Aug 2018 16:24

I still wouldn't like to be definitive based on that but have a look at para 3.4 of Notice 708 and see if the cap fits.

If I had to vote, I'd vote standard rated.

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Replying to lionofludesch:
By Ruddles
15th Aug 2018 17:36

Second vote for S/R

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paddle steamer
By DJKL
15th Aug 2018 18:15

I am also for SR.

In my experience (though I am sure there are myriad perms) the PM's role ( insofar as we have ever used a PM) is to arrange for the supply of materials, services, coordinate the professional team (herd cats), hopefully stops the architect spending all the client's money and get closely involved with the final dispute resolution re price/quality/standards etc that happens at the end of all contracts. In effect he/she is usually universally hated by all.

But the PM does this on behalf of the client, in effect a paid administrator, and merely provides professional service similar to the architect, QS et al, thus he/she is, I believe, a SR supply.

(Though sometimes can be made ZR by hiding the PM supply within the building supply on a design and build project)

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chips_at_mattersey
By Les Howard
15th Aug 2018 18:29

Some 'hands-off' supplies are excluded from zero rating.
But, whether the supplies are standard or zero rated, your client will provide proper invoices.
But, the D&B option will work; or have the managers sub-contract to a Contractor. This will avoid irrecoverable VAT being charged.

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Replying to leshoward:
paddle steamer
By DJKL
15th Aug 2018 19:59

Though can adds its own whole raft of legal issues re collateral warranties. (The who is the client issues when one of the professional team screws up, and passing through to the final end user of the build the ability to rely on the PII of the professional team)

Sometimes, on very small projects, there can be less money in the possible lost vat than in the additional legal fees.

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