Buildings and construction ― building materials

By Tolley
VAT_tax_img4

The following Value Added Tax guidance note by Tolley provides comprehensive and up to date tax information covering:

  • Buildings and construction ― building materials
  • What are building materials?
  • What is the VAT liability of building materials?
  • When are building materials ‘incorporated’ into a building or its site?
  • When is VAT recovery on goods incorporated into a building blocked?
  • Practical points ― building materials and the input tax block

This guidance note describes the VAT treatment of supplies of building materials when input tax on certain goods incorporated into buildings is blocked and cannot be recovered For an overview of the liability of supplies relating to construction conversion and renovation more broadly see the Overview construction conversion and renovation guidance note For input tax generally see the What is input tax guidance note For in depth discussion of the legislation and case law in relation to building materials see De Voil Indirect Tax Service V4 242 and for the input tax block see De Voil Indirect Tax Service V3 444 What are building materials The following bullet points set out the conditions that goods have to meet in order to be classed as building materials for VAT purposes Goods will not be building materials unless they meet all of the conditions the goods must be ordinarily incorporated into the kind of building being constructed converted renovated etc the goods must not be finished or prefabricated furniture or materials that will be used to produce fitted furniture except kitchen furniture the goods must not be electrical or gas appliances with certain exceptions the goods must not be carpets or carpeting materials VATA 1994 Sch 8 Group 5 Notes 22 23 VATA 1994 Sch 7A Group 7 Note 6 Group 6 Note 12 Notice 708 section 13 VCONST13500 When are goods ordinarily incorporated for these purposes When goods are seen as ordinarily incorporated into a building for these purposes is described later in this guidance note Prefabricated furniture Finished or prefabricated furniture eg bathroom cabinets and the materials that will be used to produce fitted furniture do not count as building materials However there is an exception for fitted kitchen furniture and the materials which will be used to construct it Fitted kitchen furniture is considered to be building materials VATA 1994 Sch 8 Group 5 Note 22 a b Notice 708 para 13 5 HMRC

More on Buildings and construction: