If you are constructing a new dwelling, it is always worth checking that the conditions are met to allow the property to be treated as new build. If the conditions are not met HMRC will reject any claim for VAT made under the DIY House Builders scheme.
This is also an important point for builders zero rating their construction services and development businesses seeking to recover VAT on building materials. HMRC will assess for VAT, interest and penalties of the conditions for the property to be treated as new build are not met and work is zero rated VAT, or VAT on building materials is claimed, in error.
It is vital that the necessary planning permission for the work to be undertaken is held on record and that clear evidence of any supplementary discussions concerning planning permission amendments etc is also retained on file.
If you are involved in a project to build a new house or apartments it is always worth seeking professional VAT advice to ensure that any potential exposures to VAT are mitigated. Please give us a call if this is of interest or concern.
John Elliott, Tax Partner/Sue Stephens, Personal Tax Consultant
