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Would VAT be charged on flooring for a new build

Is there VAT on flooring for a new build, the flooring not being supplied by the builder

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So purchasing a new build house and intending using a 3rd party to supply the laminate flooring (carpets always standard rated) the question is the builder will allow the flooring company to measure before the house is "completed" but will only allow the laying of it once the new build is handed over to the purchaser. I have read the vat guidance but am seeking clarity as some flooring businnesses say they will zero rate while others say it may be zero rated othyers say standard! If the builder provides the flooring then yes it would be zero rated.

Guidance talks about completion but is the property actually "complete" without any flooring?

Advice would be greatly appreciated.

 

 

Replies (19)

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RLI
By lionofludesch
30th Jul 2021 20:25

I vote yes.

I like your thinking but it's not a winner for me.

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By Hugo Fair
30th Jul 2021 20:59

What's in place when the "new build is handed over to the purchaser"? Open joists? Or some sort of sub-flooring (like chipboard or whatever)?
The latter would suggest your "laminate flooring" is really just an extra finish (much like carpet) to suit your aesthetic tastes - so I reckon VATable.
I could see your argument if there's no floor at all as the new build is neither safe nor habitable in that state ... but I'm not enough of a VAT expert to be sure.

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By lesley.barnes
30th Jul 2021 23:01

HMRC define completed in VAT notice 708 3.3.2. Based on that I would say that the laminate flooring being laid after it had been handed over to the purchaser would prevent Zero rating. I'm assuming that the purchaser or their lender would require the certificate of completion before they could complete the sale.

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Replying to lesley.barnes:
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By Hugo Fair
31st Jul 2021 00:17

Hence my questions about the state of the floor prior to the laminate layer - i.e. whether any floor was in existence or merely the structural support for a floor.

VAT notice 708 3.3.2 specifically mentions "whether the building is habitable or fit for purpose" as one of the factors determining whether the project is complete (in the context of this VAT issue).
I'm certain that Building Control wouldn't sign off the project as completed if the building was missing flooring sufficient to ensure safe walking.

I don't believe that if the work is carried prior to cert of completion that it makes any difference whether the work is performed by the main builder or by another contractor?

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Replying to Hugo Fair:
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By Tax Dragon
31st Jul 2021 07:02

Hugo Fair wrote:

Hence my questions about the state of the floor prior to the laminate layer - i.e. whether any floor was in existence...

I read this thread
Before I went to bed
Had a dream, inter alia,
'Bout a day trip to Australia.
Bought a house, opened the door,
Stepped inside, fell through the floor.

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Replying to Tax Dragon:
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By JacquiMBurns
04th Aug 2021 14:04

Love the rhyme!
One would say that laminate is laid on top of the floor so is a decorative addition & not part of the 'build' element

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Replying to JacquiMBurns:
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By Tax Dragon
04th Aug 2021 14:49

A bit like a carpet?

I think you may be right - and it makes sense now, thanks. From Hugo's description, I was picturing a gaping chasm - a big hole - where the floor should be.

Btw, did you know that the estimate of the time taken to get to Australia that way has reduced from 42 minutes to 38?https://www.sciencemag.org/news/2015/03/how-long-would-it-take-you-fall-...

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Replying to Tax Dragon:
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By Hugo Fair
04th Aug 2021 15:11

Fascinating ... I particularly liked the (unusual from a scientist) final 9 words:
* ".. by that point, the object is moving so fast that it actually spends very little time passing through the core, where the constant-force approximation is obviously wrong. So in the end, the approximation is good enough."

BTW, my original post was merely pointing out that OP hadn't made it clear whether the laminate was being applied to some sort of floor structure - or whether it was the floor structure (without which the building was unfinished).

And yes, I too loved the poetry - worthy of Lewis Carroll!

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Replying to Tax Dragon:
RLI
By lionofludesch
04th Aug 2021 15:34

Tax Dragon wrote:

A bit like a carpet?

I think you may be right - and it makes sense now, thanks. From Hugo's description, I was picturing a gaping chasm - a big hole - where the floor should be.

Btw, did you know that the estimate of the time taken to get to Australia that way has reduced from 42 minutes to 38?https://www.sciencemag.org/news/2015/03/how-long-would-it-take-you-fall-...

What's surprising is that if you built a straight tunnel from anywhere to anywhere, and ran a frictionless train down a railway line, the time taken to get from one end of the tunnel to the other would be the same.

This is because the length of the tunnel is reduced by the same factor as gravity is diluted.

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Replying to Hugo Fair:
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By Southbankdelboy
03rd Aug 2021 21:53

I totally agree it makes no difference who carries out the work but the point here is that if the builder does it it may be prior to the completion certificate = zero vat whilst if a contractor does it it would only be after the completion certificate is issued = 20% vat, as the builder would not allow the work to be done prior to completion by the builder.

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Replying to Southbankdelboy:
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By Tax Dragon
04th Aug 2021 06:39

You've told us the answer. What is the question?

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By Tax Dragon
31st Jul 2021 07:07

Why might the answer for a garden gate be different? Is it because you don't need planning for the type of flooring? (I didn't know you did for a gate. Live and learn.)

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Small Dog's RAT Return
By Oldmanwetmix
31st Jul 2021 08:14

Won't the answer also depend on whether the builder is prepared to agree they are selling an unfinished house?

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Replying to Oldmanwetmix:
RLI
By lionofludesch
31st Jul 2021 08:30

Oldmanwetmix wrote:

Won't the answer also depend on whether the builder is prepared to agree they are selling an unfinished house?

Not to mention the hassle of getting it signed off after fixing the floor.

Just pay the VAT. It'll be cheaper.

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Replying to lionofludesch:
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By Southbankdelboy
03rd Aug 2021 21:49

lionofludesch wrote:

Oldmanwetmix wrote:

Won't the answer also depend on whether the builder is prepared to agree they are selling an unfinished house?

Not to mention the hassle of getting it signed off after fixing the floor.

Just pay the VAT. It'll be cheaper.


The point here is that the builder gives the option to supply and fit a choice of flooring and will possibly be laid prior to the building completion certificate being issued-maybe?!
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Replying to Southbankdelboy:
RLI
By lionofludesch
03rd Aug 2021 21:56

Southbankdelboy wrote:

lionofludesch wrote:

Oldmanwetmix wrote:

Won't the answer also depend on whether the builder is prepared to agree they are selling an unfinished house?

Not to mention the hassle of getting it signed off after fixing the floor.

Just pay the VAT. It'll be cheaper.

The point here is that the builder gives the option to supply and fit a choice of flooring and will possibly be laid prior to the building completion certificate being issued-maybe?!


I don't deal in maybes.
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By Paul Crowley
31st Jul 2021 23:06

Discussed this with a good client Friday about 7pm
Very easy for tax aware people to explain the rules
Contractors and subcontractors will always err on the side of not getting in trouble with HMRC VAT so will always look to charge 20%.
No longer can Subbie rely upon contractor to certify the VAT status.

My client's Barn conversion should be 5%
Genuine new build should be zero
Materials dumped on site 20% (not a subcontractor )

That does of course ignore the Domestic Reverse charge.

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By davidflood
09th Aug 2021 08:40

Having worked for a flooring company for many years, I have the "t-shirt" so to say

As long as the flooring is installed and completed before the date of practical completion ( as evidences on the certificate of practice completion ) the works can be zero rated ( not carpet ). It is important to obtain a copy of the certificate as evidence should you be required to prove this in the future

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