VAT Refunds for DIY Housebuilders

I am going to build my house on a plot of land I recently inherited.  Although I will be doing most of the labouring myself I will still have to purchase the materials and equipment to build the property. I understand there is a scheme allowing me to reclaim the VAT I incur on these purchases?

1st September 2009

A VAT refund scheme is available for individuals who build new houses for personal use who may recover VAT on certain building materials. The scheme also covers individuals who convert non-residential properties into dwellings, allowing them to reclaim VAT on certain building materials and services.

The HMRC recently reviewed the scheme, as a number of applicants were incorrectly completing the claim forms and were not supplying enough information which led to delays in issuing the VAT refunds.

With effect from 15th August 2009 there will be new forms to enable you to do this, replacing the old guidance for DIY house builders.  There is now a specific form called 431NB for newly built houses and 431C for conversions. The questions are slightly different from the current form but these are designed to deal with many of the common issues that currently arise.

For more information on the scheme, we recommend you speak with your local TaxAssist Accountant.

By Jo Nockels

Disclaimer: The information provided is based on current guidance (at date of publication) from HMRC and may be subject to change. Any advice shared here is intended to inform rather than advise. Taxpayer's circumstances do vary and if you feel that the information provided is beneficial it is important that you contact us before implementation. If you take, or do not take action as a result of reading this information, before receiving our written endorsement, we will accept no responsibility for any financial loss incurred.

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