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Reduced rate VAT on extension/conversion

Reduced rate VAT where a building has been extended and split into 2 dwellings

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Client is completing a major re-jigging of a property he rents out.

He owns the whole building which was split Level 1 a shop rented out and Level 2 a 2 bedroom maisonette also let out.

He has now almost completed splitting Level 2 and converting the unused attic / roof space lets call it Level 3 of the property so the revised accommodation to let now comprises

Half of Level 2 A self contained one bedroom flat to let out


The maisonette is now a 3 bedroomed maisonette comprising half of Level 2 and all of level 3; this maisonette will be let separately.

Would this work which has created an extra dwelling within the building be eligible for the 5% reduced rate of VAT? The builder isn't sure.


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By Matrix
06th Apr 2020 18:41

I think your post has been missed Anne since it doesn’t have the new f word in it!

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By Les Howard
06th Apr 2020 19:20

It needs a proper review of architectural drawings to ensure works are eligible for the reduced rate.

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By arthurallan
07th Apr 2020 09:19

Thanks Les. Yes I have had a look at the drawings that accompanied the planning application and approval.

Basically before the work there was a 3 bedroom maisonette comprising Living area and kitchen on Floor 1 and 3 bedrooms on Floor 2. There was an unused roof space.

After conversion the roof space is now being used.

The revised configuration (as per planning permission) is
First Floor is now a self contained one bedroom flat.
Separate duplex apartment on second and third floors (formerly roof space) which is now 2 bedrooms on second floor and a living area and kitchen on the third floor.

Would this work qualify for reduced rate VAT? My understanding is "yes" on the building work (and fitten kitchen and possibly new fitted bathroom) but no on fees, scaffolding, furnishing etc..

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