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HMRC internal manual

VAT Construction

From
HM Revenue & Customs
Updated
, see all updates

Introduction: VAT liability

Liabilities

Construction work can be standard-rated, reduced-rated or zero-rated, depending on what is being carried out.

Work containing a zero rate or reduced rate liability should always be backed up with valid documentation, such as drawings, copies of planning or listed building consent, eligible certificates, and so on.

Some builders also occasionally act as developers, such as constructing and selling a new house or renovating and selling an old property. The sale of the property may be:

  • exempt
  • zero-rated
  • outside the scope of VAT

or

  • standard-rated.

Certificates

Claims for zero-rating or reduced-rating in connection with relevant residential and relevant charitable purpose buildings must be supported by a relevant certificate. For more guidance on certificates, check VCONST18000.

The certificate regime does not extend to sub-contractors and they must charge VAT at the standard rate.