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Vat rate on construction work

to add floors to existing building

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Construction work to add 2 additional floors above an existing 4-storey block of flats. The new floors will be accessed via the existing building entrance (common entrance) and a new lift will be fitted to serve all floors (old and new). Does the construction work qualify for the 5% reduced rate of VAT? In my opinion it doess but the accountant of the developer says this is zero rated (newly built). Thank you in advance.

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By David Ex
08th Jul 2021 16:01

https://www.gov.uk/guidance/buildings-and-construction-vat-notice-708#se...

"A qualifying building is constructed when ... an existing building is enlarged or extended and the enlargement or extension creates an additional dwelling or dwellings "

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paddle steamer
By DJKL
08th Jul 2021 19:21

How many individual dwellings before how many after?

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chips_at_mattersey
By Les Howard
09th Jul 2021 11:47

depending on the details, you might be able to zero rate the construction of any additional flats. Note 16(b) to zero rate Group 5 refers to an extension of enlargement which creates new dwellings.
From your description I would lean towards the zero rate, but recommend more detailed advice for certainty.

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