The VAT DIY Housebuilders scheme has been designed to allow a homeowner, building a home, to benefit from certain special VAT rules. The rules allow the qualifying construction costs of new homes and certain conversion works to be zero-rated and VAT repaid on certain qualifying construction costs.
The following types of conversion are eligible to use the DIY Housebuilders scheme:
- The conversion of a previously non-residential property into a dwelling to be used either by the homeowner or their relatives as a family home for residential or holiday purposes.
- The conversion of a previously residential property for either the homeowner or their relatives, that has not been lived in for the last 10 years or more, into a family home for residential or holiday purposes.
- The purchase of a converted building as a ‘shell’ from a developer which has been fitted out to completion, for either the homeowner or their relatives as a family home for residential or holiday purposes.
- The conversion of a building into one that is intended solely for a Relevant Residential Purpose.
Business related claims will likely be rejected by HMRC. These may include:
- Claims by a speculative developer.
- Claims by a landlord.
- Claims by homeowners running a bed and breakfast business.
- Claims by homeowners running a fee-paying care home.
- Claims by a membership club or an association.
- Claims by homeowners running a fee-paying school.
Homeowners that work from a home office are usually eligible to make a claim.
If you would like more information on this subject please do contact us.
Lesley Malkin, Audit Partner