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HMRC internal manual

VAT Construction

Zero-rating the construction of buildings: are my services supplied ‘in the course of the construction’ of the building: meaning of ‘in the course of construction’

The expression ‘in the course of construction’ is not defined in law. It has a wide application in terms of what services are captured because any service in the course of construction that relates to the construction qualifies for zero-rating, excepting those of an architect, surveyor or any person acting as a consultant or in a supervisory capacity which are standard-rated.

Because a service must be one supplied in the course of construction, which implies a connection in both time and geography to the construction process, not every service associated with construction is zero-rated.

This page describes the broad principles to apply, to a given set of facts, when deciding if services are supplied ‘in the course of the construction’ of a building. You can find examples of how these principles apply to given facts in Notice 708 Buildings and construction.

Variations in facts from one case to another can produce different results - the outcome turning on what is referred to in Court judgments as ‘fact and degree’. It is therefore vital that all relevant facts are obtained before making a decision including the context of the broader development programme to the works in issue.

The broad principles are split into two parts: