Zero rated vat (1 Viewer)

HatterScaff

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Can anyone confirm what is vatable and what isn't

I remember getting a bollokin some years ago, off the revenue for not charging VAT on a new build house!:embarrest:

I said its new build so Zero rated!

They said:
If its labour only, NO VAT
Hire only, VAT at standard rate

But they said, if its labour and plant hire together, then the standard rate of VAT will apply on everything!


Now i've looked on the web and they say, you can zero rate the labour element????:cry:

and to top that, there are differing rates for conversions, green energy, empty properties, etc etc:wacko:

totally confused

PC's only pay what they feel on self billing, and when I point out to them the VAT is due, they just ignore me:evil:
 
Can anyone confirm what is vatable and what isn't

I remember getting a bollokin some years ago, off the revenue for not charging VAT on a new build house!:embarrest:

I said its new build so Zero rated!

They said:
If its labour only, NO VAT
Hire only, VAT at standard rate

But they said, if its labour and plant hire together, then the standard rate of VAT will apply on everything!


Now i've looked on the web and they say, you can zero rate the labour element????:cry:

and to top that, there are differing rates for conversions, green energy, empty properties, etc etc:wacko:

totally confused

PC's only pay what they feel on self billing, and when I point out to them the VAT is due, they just ignore me:evil:

We've always charged new build housing at 0% for VAT purposes.
Whenever we've been asked to charge VAT on the materials, we've said we had included the material for free on the job.

You're right though, there are a lot of different rates for different kinds of jobs.

If you are working on a residential property that has been empty for over 2 years, the VAT is charged at 5%. The owner does have to get proof from the local council that the property has not been lived in though.
 
Thanks for that Dass

Just opened another can of worms there, if you include materials for free or give discount, I'm led to believe that you are still liable for the nett vat element, (they want their slice of the cake still!)
 
Phill,
At the risk of sounding like a tight@rse, we charge VAT on charity work. We've never had anyone tell us any different

:cheesy:
 
Unless they provide you with a charity status exemption then we charge the VAT as well, because the VAT man will want his 20% whether you charge them or not.
 
It's always handy with new builds as they are zero rated VAT. This way genuine company's are able to compete with those that would do them for ££££..
 
You shuld always charge full vat? if the customer wants to argue the toss tell him to clame back the vat himself. Yes you can split the materials and labour however if that is not the way the quote has been accepted (signed contract) then vat is payable on all. If you still get problems with customers not paying contact the tax office and report the customer
 
Got to be honest and say we charge all new builds at 100% VAT even although we know you can split it and only charge it on the material. It just makes it simpler and reduces the chances of a major f-up.

You can also change the way you pay the VAT so you only pay for cash brought in instead of invoice's written.
 
Sound advice we do the same as have had the vat pull us in past
 
Never had a pull Scaffy, but heard a few horror stories. Best advice I got when starting out was don't mess with the vat man.
 
Very true mate they have more powers then the police -
 
I rang the vat office quite a few years ago and they told me I didn't have to charge vat on new build. I now have the vat after me for vat I haven't charged for the last 4 years on new build.

Bloody nightmare....I give up
 
When working on a new build always ask for a copy of there F10 & vat excemption certificate - if they cant supply it charge @20% if they can then its zero rated- everything else without exception should be 20% just to cover your arse
 
Was always told by the accountant that materials and hire must be VAT rated ,
But on new builds the labour can be zero rated ,
And split the invoice 70/30 , with 70% being materials and the 30% being labour ,
You have to be careful because some of these builders think it's all zero rated as S.P says if in doubt charge it and make them produce their certificate
 
Surely 70% for materials is a high figure. In certains cases I'm sure we have all done a job for wages only therefore each job should be split on its own merits. This would become rather complex though as you could split the invoice differently for tax purposes.
 
I suppose if you are only getting taxed on 30% for labour costs it improves your cash flow...
 
I have dealt with vat in contract scaffolding supply since it's introduction in the early 1970's. If you are providing a supply and erection service you will need to charge the standard rate of vat on the whole service irrespective of the tax status of the individual site. I have seen several scaffolding contractors take the view of part zero rating only to be pursued into bankruptcy a few years down the line by HMRC.
I attach the specific ruling from the HMRC 708 vat in construction notice recently provided by Hatterscaff on a similar thread.

HMRC Notice 708 Buildings and construction
November 2011
Page 52 of 120
• means of providing drainage or security; or
• provision of means of waste disposal.

All other services are standard-rated. For example, you must standard-rate:
• the installation of goods that are not building materials, such as
carpets or fitted bedroom furniture;
• the erection and dismantling of scaffolding;
• the hire of goods;
• landscaping; and
• the provision of professional services, such as those provided by
architects, surveyors, consultants and supervisors.

All building contractors can and will claim back vat from HMRC within 3 months of being charged.

Hatterscaff, I re-read your post and I still believe in the essence of this post. with Bow scaffolding in the mid 1990's they were told by the then customs and excise that split rate was acceptable only to face a £300k bill for historic non-collection later in 2003. If HMRC have told you that split rate is acceptable you must get it in writing from the senior manager (signed) of the HMRC department you are dealing with.

Personally with the dealings I have had - and seen, with tax men in the past, I no longer trust any individual's view.
 
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Charge the vat on new builds, shouldn't be a problem don't split the invoice in to materials and labour, keep it simple.
 
I forgot to mention in my last post that on zero rated jobs only materials/services that are incorporated into the fabric of the completed structure are 0 vat.
As scaffolding services do not form part of the building like say bricks or structural steel it must always be standard rated.
 
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