HMRC Unveils VAT Refunds for DIY Housebuilders Undertaking Conversions

"Important Updates to Invoice Requirements and VAT Refunds for DIY Housebuilders Scheme Announced"

Update Dec 15, 2023: The Irish Revenue has made some important updates to the requirements for invoices. Now, an invoice must include the “date of issue” as one of the mandatory details. Additionally, they have included information advising taxpayers not to send original documents, as they will not be returned. These updates aim to streamline the VAT refund process and provide clarity for taxpayers.

If you are a DIY housebuilder and are converting an existing building into a dwelling, you may be eligible to claim a VAT refund using the DIY housebuilders scheme. This scheme allows you to reclaim VAT on certain goods and services used in the construction process. However, it is important to understand the eligibility criteria and the steps involved in making a claim.

Not all conversions are eligible for the DIY housebuilders scheme. The scheme only applies to conversions that involve the construction of a new dwelling or the conversion of a non-residential building into a dwelling. It does not cover renovations or extensions to existing dwellings. It is essential to determine if your project falls within the scope of the scheme before proceeding.

Before starting your conversion project, it is crucial to consider the planning requirements. You may need to obtain planning permission or comply with building regulations. It is advisable to consult with your local planning authority to ensure that your project meets all the necessary legal and regulatory obligations.

Once you are ready to begin the construction work, you may choose to employ a builder to carry out the necessary tasks. When hiring a builder, it is essential to ensure that they are registered for VAT and that they provide you with a valid VAT invoice for their services. This invoice will be required when making your VAT refund claim.

When it comes to goods, you can claim VAT on materials that are incorporated into the building or dwelling. This includes items such as bricks, cement, timber, and plumbing fixtures. However, you cannot claim VAT on items that are not permanently attached to the building, such as furniture or appliances.

In terms of services, you can claim VAT on professional fees, such as architects’ or engineers’ fees, as well as on services provided by contractors, such as plumbing or electrical work. However, you cannot claim VAT on services that are not directly related to the construction process, such as interior design or landscaping.

Once your conversion project is complete, you can proceed with making your VAT refund claim. To calculate the amount you can claim, you will need to determine the VAT paid on eligible goods and services. This can be done by reviewing the VAT invoices you have received and identifying the VAT amount charged.

To make your claim, you will need to complete the appropriate VAT refund form and submit it to the Irish Revenue. The form requires details of the project, including the address of the building, the date of completion, and the total cost of the construction work. You will also need to attach copies of the VAT invoices supporting your claim.

The processing time for VAT refund claims can vary, but the Irish Revenue aims to process them within a reasonable timeframe. However, it is important to note that some claims may be rejected or not paid in full if they do not meet the eligibility criteria or if there are discrepancies in the supporting documentation. In such cases, the Irish Revenue will provide an explanation for the rejection or partial payment.

In conclusion, if you are a DIY housebuilder converting an existing building into a dwelling, the DIY housebuilders scheme can provide you with an opportunity to reclaim VAT on eligible goods and services. However, it is crucial to understand the eligibility criteria, follow the necessary steps, and provide accurate documentation to ensure a smooth VAT refund process. For more information and guidance, you can visit the official website of the Irish Revenue.


Barry Caldwell

Barry Caldwell

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