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VAT recovery building and construction

Recovery of full VAT on purchases for a contractor who provides services with reduced rate of 5%

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Hi, 

I'm a contractor and I'm currently working on a conversion of a non- residential building into qualifying dwelling. I will issue sales invoices with reduced VAT rate of 5% (confirmed with HMRC). My question is, when I buy building materials for this particular job, am I able to reclaim full 20% of VAT on all building materials, tools etc? Or would it have to be a reduced rate of 5%? I have been reading the VAT Notice 708 and I'm confused. 

Thank you for your help 

Replies (9)

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By The Dullard
25th Oct 2019 13:44

Would you mind knocking me up a very quick extension, please?

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By Accountant A
25th Oct 2019 14:31

Wow! That was a quick career change! 3 months ago you were working as an accountant according to your last question:

https://www.accountingweb.co.uk/any-answers/hire-purchase-agreement-0

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Replying to Accountant A:
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By CelinaC
25th Oct 2019 14:56

Dear Accountant A, it's a question from my client that I've just copied :) If you can't help, do not comment.

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Replying to CelinaC:
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By Accountant A
25th Oct 2019 15:05

CelinaC wrote:

Dear Accountant A, it's a question from my client that I've just copied :) If you can't help, do not comment.

I'll comment when I like. I'm an accountant unlike you.

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Replying to Accountant A:
JCACE
By jcace
25th Oct 2019 16:14

Accountant A wrote:

I'm an accountant unlike you.


Not a part qualified nuclear physicist? Or a Sift undercover police officer/bouncer?
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Replying to jcace:
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By Accountant A
26th Oct 2019 22:16

jcace wrote:

Not a part qualified nuclear physicist? Or a Sift undercover police officer/bouncer?

I have many hats ....

Who wants to be a milliner?

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Replying to Accountant A:
JCACE
By jcace
27th Oct 2019 09:55

In any event, I'm sure you're an accountant like no-one else.

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Replying to CelinaC:
RLI
By lionofludesch
25th Oct 2019 17:03

CelinaC wrote:

Dear Accountant A, it's a question from my client that I've just copied :) If you can't help, do not comment.

A client ?

Nice that he explains that he's a contractor.

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JCACE
By jcace
25th Oct 2019 15:50

The fact that your supplies are at the reduced rate of VAT or even zero rated won't mean that you change the amount of input tax that you reclaim. Unless you are partially exempt, you should be able to recover the input tax as charged, subject to normal rules.
Your client should make sure that standard rate VAT is charged where appropriate - see para 7.6 of VAT Notice 708.

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