How to reclaim VAT for conversion projects
You can recover money from the tax man, but you only get one chance to submit a claim. Tim Doherty explains how to make a successful application
One of the ways that the government is trying to encourage people to selfbuild is to allow them to reclaim the VAT paid on materials once the scheme is finished (and not pay it on labour in the first place).
But extensions and renovations to existing houses do not have the same incentives, meaning the VAT must be charged and paid by the homeowner to builders and merchants.
However, conversion schemes come under their own category as they fall somewhere between new build and renovation. In practice, they have been put in the same bracket as self-builds, so you should be able to recover some VAT paid to the supply chain for eligible labour and materials. But the tricky thing is making sure you submit the right details within the right timeframe, as very specific rules have to be followed – here’s what you need to know.
Qualifying conversions
To fall under the conversion category there must be a change of building status from non-residential (such as barns, shops, restaurants, churches, schools or offices) to dwelling.