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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: services that ‘facilitate construction of the building’

The first alternative element of the first test that determines whether work is closely connected with the construction of a building requires the service to ‘facilitate construction of the building’.

In its judgment in St. Mary’s RC High School ([1996] STC 1091), the High Court elaborated on what it means by ‘services that facilitate the construction of the building’:

Services which facilitate the construction of the building would include for example such matters as site clearance, ground works and the provision or improvement of an access where needed to enable the work of constructing the building to be carried out.

Remember, the hire of goods cannot be zero-rated (VCONST02730).

You can find examples of accepted services in Notice 708 Buildings and construction. This list is not exhaustive.

Examples of non-qualifying services include:

  • archaeological services
  • off site preparation (VCONST02550).