You can apply for a VAT refund on building materials and services if you’re:
- building a new home
- converting a property into a home
- building a non-profit communal residence – eg a hospice
- building a property for a charity
The building work and materials have to qualify and you must apply to HM Revenue and Customs (HMRC) within 3 months of completing the work.
But its important to note..
https://www.gov.uk/hmrc-internal-manuals/vat-construction/vconst24350
When a sole proprietor or partnership is in the business of constructing property for sale and builds a house on his own land for his own occupation, or by a connected person, he can either:
- recover the VAT through his VAT return in the normal way
or
- claim the VAT through the Refund Scheme.
Until 1 January 2011, a sole proprietor or partnership (in the business of constructing property for sale) who built a house on his own land for his own occupation, or by a connected person, could either:
- recover the VAT through his VAT return in the normal way
or
- claim the VAT through the DIY Refund Scheme.
After 1 January 2011, however, this choice is no longer available to him and it will only be possible to recover VAT through his return to the extent that the services and materials will be used for taxable business purposes. Where the house has not been constructed for a business purpose it will not be possible to claim back the VAT through his return. The only option that will now be available to him will be to make a claim through the Refund Scheme.
Companies and other corporate bodies who build dwellings for their staff or officers of the company can’t make a Refund Scheme claim because the tax is incurred in the course or furtherance of their business.
VAT incurred in relation to staff accommodation is input tax and can be recovered through the company’s VAT return, subject to the normal rules.
As such the only way to recover the VAT is by making a DIY claim for the cost of materials and this should be made as one claim within 3 months of completion.
