Claiming VAT back on build?

[Coolgirl]

Hello all
First time on here. We have an old brick barn on our land which now has planning and building regs approval to turn into two holiday lets. We finding it very difficult to find a good builder and we've only managed to receive one quote back as yet. We knew it would have a very high cost to renovate the barn but it's when the VAT is added on its becoming difficult to find the extra funding. We've recently approached an accountant but didn't get back to us, so now trying another.
I would love to hear from someone who has been in his situation.
Thanks in advance.

[bessie]

Are you vat reg first of all.
Why not ask the vat helpline as the information they give you will be correct and you will always be able to reference back to their instructions.
I just cannot remember which way round it is ,our old farmhouse restored or the new bungalow which got the vat refund I seem to think it was the new build.
I know all work done on Ast property no vat refund.and when we did the cottage up I could not claim vat as I was not charging vat to guests.

[anya752000]

Hi Coolgirl,
Over the last couple of years we have rebuilt our own house (able to claim the VAT back after providing proof it had been empty for over 10yrs) and converted a building into a holiday let (unable to claim VAT back as it is not for your own use i.e. it is for rental).

You can offset some of the money you spend fitting it out against tax paid on future earnings. These are called integrated features and there is advice online as to what these are.

As Bessie rightly says you can only reclaim the VAT paid on the building work if you are already VAT registered and if you are you have to charge VAT on your rentals.

Feel free to message me if needed.

[anya752000]

Also to say there are accountant companies that specialise in holiday lets, I'm fairly sure a few people on here use them and would be able to advise you or you could do a search on the forum.

I don't use an accountant as I enjoy doing it myself but if your situation is complex it's probably well worth the relatively small yearly fee.

Regards
Jennie

[Coolgirl]

Thank you for your replies.

Bessie - no were not VAT reg and wouldn't really need to be? Wouldn't earn enough but could I become vat reg and then claim the vat on building work back.....I'm just not sure? But great idea about vat helpline.

Thanks again everyone

Nicky

[AndrewH]

Hello all
First time on here. We have an old brick barn on our land which now has planning and building regs approval to turn into two holiday lets. We finding it very difficult to find a good builder and we've only managed to receive one quote back as yet. We knew it would have a very high cost to renovate the barn but it's when the VAT is added on its becoming difficult to find the extra funding. We've recently approached an accountant but didn't get back to us, so now trying another.
I would love to hear from someone who has been in his situation.
Thanks in advance.

Welcome Coolgirl! I was so interested to see your post. Before our move to live in Greece and we have been here for seven years, we lived for ten years in a converted barn in West Sussex. What we bought was a complete tumbled-down wreck, which in former days had been used to house cattle and store hay. It was about 250 years old. When conversion was completed, we were the first human inhabitants and that was hugely significant when it came to recovering VAT.

I don't know what happens nowadays, but then ( 16 or 17 years ago) there was a tax concession in the UK that when an agricultural building was converted to a residential building for the very first time the VAT on all the expenditure involved, was recoverable. It was a matter of carefully collecting and keeping all the receipted VAT invoices relating to the conversion and sending them off to a special VAT office (in our case on the Isle of Wight) and the upshot was a nice cheque for £38,000. Mind you, we had spent an awful lot.

I don't think you need an accountant to tell you anything at this stage. It really is a straightforward matter of finding it out for yourself. I am sure you will be able to get all the relevant information regarding VAT from HMRC. More than likely it would be somewhere on their website, if this concession still exists.

I am not even going to mention here the trouble we had with the local planning department and English Heritage, but I will just make two other points.

(1) If your barn is an ancient structure with old oak beams and walls bonded together using cow dung and straw then employ a builder with experience of converting barns. These specialists do exist and they are no more expensive (in our experience) than any other builder

(2) Use an architect who has the flare and imagination to beautifully fill the barn space he or she is presented with. It might be the architect's first barn conversion, but I don't think that matters too much. What does matter however is that he has a good ongoing relationship with the local planning department while building work progresses. Our architect was very good in his job, but he was an ex-council architect with a grudge and he enjoyed winding the planners up - fun for him, but it gave us (OH and me) sleepless nights!

There are lots of LMHers with barns as holiday lets, so I think you should get plenty of information.

[anya752000]

Nicky,
Just seen this:

http://www.rossmartin.co.uk/vat/418-vat ... ome-owners

So maybe I have to take back my previous post??
I'll be looking into it also.
Jennie

[anya752000]

Scratch that - It looks like it only applies if the holiday home is for personal use not business.

[anya752000]

From the HMRC site:


.....existing legislation does allow the same recovery of VAT on building materials for holiday homes that have been constructed by the individual for a non-business purpose.


For a few blissful minutes I thought my next holiday was paid for!!

[Coolgirl]

Jennie - thank you so much for your help and time in posting your comments - it really is very supportive and helpful

AndrewH - very helpful advice and thank you for taking your time to type your post.

Just thought I would add if anyone knows a good builder in East Yorkshire area near Hull - please let me know!

[bessie]

Hi coolgirl,
Good to hear a fellow hatter in East Yorkshire.There are some good builders in our area but look for someone who is used to barn conversion and renovation work. Are there any in your area ,you could ask about and see who did the work.I take it you have had plans drawn up ,that way each quote will be like for like.
I think I watch too much grand design they make it look so easy to project manage yourself.
We asked serval builders on the old house ,tricky they said just knock it down and start again clearly they had not met the planners.

[newtimber]

Thank you for your replies.

Bessie - no were not VAT reg and wouldn't really need to be? Wouldn't earn enough but could I become vat reg and then claim the vat on building work back.....I'm just not sure? But great idea about vat helpline.

Thanks again everyone

Nicky

If you aren't VAT registered, then it isn't worthwhile getting VAT registered for one holiday let. You'd then have to charge VAT on the rentals, so 20% of your income disappears to HMRC.

[Nemo]

A few useful links hopefully!
http://www.rossmartin.co.uk/vat/418-vat ... ome-owners

https://www.gov.uk/government/publicati ... ns-vat431c

http://www.homebuilding.co.uk/advice/ex ... vating/vat

It looks like it might be only for those who use the building for themselves though.

[Coolgirl]

Newtimber - this is my thought also.

Bessie - ha ha it's funny we had the same opinion regarding knocking down and starting again but the planners treated like it was some kind of national treasure! (It's not listed) but you would of thought it was and we had to jump through many hoops to gain planning.
We've been searching for a year now for the right builder, problem we are coming across is the builders we've been recommended haven't done anything like this type of renovation before and some are busy so don't even get back to us. So if you have any ideas I would love to hear them please.

Nemo - thanks for the links going to sit
and have a good read tonight.

Many thanks everyone
Nicky

[bessie]

Coolgirl can you pm me .