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HMRC internal manual

VAT Construction

DIY builders and converters VAT Refund Scheme - eligibility of claims: condition 7: have the goods and services been used in the construction or conversion before the date of completion?



Claims can only be made for eligible goods or services used for the purposes of (and during the period of) the construction or conversion. Goods and services incurred in relation to work carried out after completion can’t be claimed.

Claims must be submitted within three months of completion. You can find guidance in VCONST24550 on how to treat late and supplementary claims.

When is a building completed?

The guidance at VCONST02530 applies to this section in the same way as it does to that section.

Buildings sold before completion

A building may be sold before the work is complete to a person who then continues or finishes the work. There is no entitlement to a refund until such time as the building (or work) is complete.

Goods for installation by a developer

A house buyer may wish the property to have fixtures and fittings to a different specification than, or over and above that, normally supplied by the developer.

Any eligible goods bought by a house-buyer that are incorporated before the developer completes the building can be claimed for under the Refund Scheme. This includes items that substitute items already incorporated by the developer.

Goods incorporated after the developer has completed the property can’t be claimed for.

Finishing off

When a house buyer buys a property from a developer, he normally buys a completed building. However, if it is bought as a ‘shell’ from a developer and (with the developer’s agreement) fitted out by the house buyer a claim can be made for the eligible goods.

This isn’t the same as the situation where a developer leaves certain works unfinished so that the house buyer can carry out subsequent alterations to the house.

No refund can be made for extra work done to a completed building bought from a builder or developer - such as adding a conservatory, patio, double-glazing, tiling, or a garage.

In Andrew Gordon Simister and Winifred Simister (VTD 12715) the developer provided wiring for security lights and additional light fittings. The Tribunal agreed that a claim for the light fittings and other works (including the construction of a garden path and erection of a conservatory) couldn’t be entertained:

I do not regard the fact that, by agreement with the Appellants [the vendor] made provision to facilitate further work proposed by the Appellants (by leaving the protruding wires) as negativing the conclusion that on completion of the contract the vendor handed over a completed building. In my judgment the question whether the building was complete ought to be regarded from the vendor’s point of view rather than by reference to any future work which the Appellants proposed. So far as the vendor was concerned, it had contracted to hand over a completed building, and it did so.