VAT due on fire & fireplace fitted in new build?

Were charged VAT on fire & fireplace installed in new build before completion - was this incorrect?

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We bought a new build from a small developer last year. The builder asked if we wanted a fire as an extra and agreed a £2000 contribution to a gas fire and fireplace that was installed prior to completion. The builder insisted we use his supplier.

The invoice was sent to the solicitor by the builder totalling £2452. At completion we were asked to pay £452. We queried this as the net cost was £2043.33. We realised we were being charged VAT - although we had already had a discussion in the supplier's office about it being zero rated because it was being installed before completion in a new build. We had to pay up otherwise we could not complete on time. 

I queried this with the builder because Notice 708 says fires and surrounds can be classed as building materials as they were articles that were 'ordinarily' incorporated in a building and therefore can be zero rated. The builder disagreed - he said because his supplier installed it and not his building company itself we had to pay VAT. However, the builder paid the supplier, the builder paid the bulk of the cost and the builder arranged access etc. All we did was choose the fire and surround.

The VAT Helpline have suggested we should approach the supplier for a refund. How should I approach this? I assume there is a mechanism for giving refunds of incorrectly charged VAT?

 

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RLI
By lionofludesch
29th Nov 2018 10:27

Yes, the mechanism is you need to sue the builder.

He needs to sue the supplier.

This should never have been standard rated at any point.

Your claim against the builder does not depend on the success of his claim against the supplier. Don't let him fob you off - he should've known better. Building's his game.

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