Q. I am in the process of buying a property that has been empty for several years. Substantial renovation is required, and I’ve been speaking to a contractor who says that he will be able to charge just 5% VAT for the work. I don't want to fall foul of HMRC, so is this correct?
A: The answer is "maybe". Building work, and the associated materials, can be subject to VAT at 5% if the building is a dwelling that has been empty for at least two years. However, any professional fees - such as designers or architects - will be subject to VAT at the standard rate. To qualify for the 5% rate, you will need to give the contractor third-party evidence to confirm the empty period. This must be from a source HMRC considers to be "reliable", such as council tax information, electoral register entries, etc. You may also be able to acquire a letter from your local authority’s council’s empty property officer - in which case you will have an acceptable form of evidence without needing to secure any other paperwork. You can find further information on VAT relating to the building trade here.
The information provided in this blog is for general informational purposes only and should not be considered professional advice. As far as we are aware, the content is accurate at time of publication. Torgersens assumes no responsibility for errors or omissions in the content or for any actions taken based on the information provided.
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