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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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
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.
I'm an accountant unlike you.
Not a part qualified nuclear physicist? Or a Sift undercover police officer/bouncer?
Not a part qualified nuclear physicist? Or a Sift undercover police officer/bouncer?
I have many hats ....
Who wants to be a milliner?
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.
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.