Value Added Tax and The Period House

Value Added Tax or VAT (currently at 17.5% in the UK), is one burden that most of us in the United Kingdom face when funding repairs and improvements to a period house. The materials we buy and the work done by a builder normally attracts this tax.

One advantage for listed building owners is that alterations with Listed Building Consent (LBC) are zero-rated for VAT if the work is done by VAT-registered contractors. Repairs and incidental alterations are standard rated.

The importance of the LBC cannot be overemphasised; it must be worded correctly to obtain the maximum advantage of the zero rating and cannot be retrospective.

All projects which are 'repair and maintenance' are not exempt from VAT. Even where old inappropriate work is being un-done, for example concrete tiles replaced with slates, this would usually be classed as 'repairs and maintenance'. However, if the LBC is worded correctly, there is a case for zero-rating.

In the case of non-listed buildings, if you are renovating a house that has not been occupied for 10 years or converting a non-residential property to a dwelling then you should be able to to claim back most of the VAT on the construction.

However, there can be no VAT refund, even a partial refund, for a single dwelling house created by converting both the residential and non-residential parts of a building.

In all the above, a VAT consultant specialist in building work is highly recommended.