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HMRC internal manual

VAT Construction

‘Approved alteration’ of a ‘protected building’ (changes introduced on 1 October 2012): Other reliefs

Other reliefs available for work to listed buildings

The changes only affect the zero-rating for protected buildings. There are no changes to other zero and reduced rates for construction work. A full list of these is set out in paragraph 2.1 of Notice 708. These include:

  • A zero rate for conversion of any non-residential building into a dwelling or dwellings or into a relevant residential building for a housing association. See Section 6 of Public Notice 708 Buildings and construction
  • A reduced VAT rate of 5 per cent for conversions of non-residential buildings into qualifying dwellings or communal residential buildings and for conversions of residential buildings to a different residential use. See Section 7 of Notice 708 Buildings and construction.
  • A reduced VAT rate of 5 per cent for the renovation or alteration of empty residential premises. See Section 8 of Notice 708 Buildings and construction.
  • A reduced VAT rate of 5 per cent VAT for the installation of energy saving materials, grant funded heating system measures and qualifying security goods. See Notice 708/6 Energy-saving materials
  • A zero rate for some construction work to suit the condition of people with disabilities. See section 6 of Notice 701/7 VAT reliefs for disabled people.

The VAT treatment of repair and maintenance work to protected buildings

This remains unchanged as such work has always been liable to the standard rate of VAT.

Substantially reconstructing a listed building that is one’s own home

This does not qualify for zero-rating as this applies only to the first grant of a major interest in the reconstructed building. The work may have qualified until 1 October 2012 as an approved alteration to a protected building and may continue to do so until 1 October 2015 if it qualifies for the transitional provisions - see below).