Supplies liable to VAT at the standard rate

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

  • Supplies liable to VAT at the standard rate
  • Sale of new and uncompleted non-qualifying buildings and civil engineering works
  • Storing goods
  • Granting sporting rights
  • Provision of parking facilities
  • Provision of hotel and holiday accommodation
  • Provision of accommodation at sports grounds or entertainment venues
  • Granting a right to fell and remove timber
  • Sporting facilities
  • Hairdressers
  • Contracts for sale

It is important to recognise that many transactions involving supplies of land and property are still liable to VAT at the standard rate. This guidance note provides an overview of the most common situations where VAT should be charged on the supply made.

VATA 1994, Sch 9, Group 1; HMRC Notice 742 ; De Voil Indirect Service V7.374 (subscription sensitive); 2006/112/EC , Article 13
Sale of new and uncompleted non-qualifying buildings and civil engineering works

The sale of a building or civil engineering work will be standard-rated if:

VATLP08000
  • it is new
  • it is partly completed

and it is not:

  • designed as a 'dwelling'
  • designed as a number of dwellings
  • intended for use solely for a relevant residential purpose
  • intended for use solely for a relevant charitable purpose

VATA 1994, Sch 9, Group 1

The sale of a new building as a ‘dwelling’ or a number of dwellings or for a ‘relevant residential purpose’ or ‘relevant charitable purpose’ is zero-rated, if the person who constructed the building is selling it.

Please see the following examples of supplies of new buildings:

Example 1

Example 2

This means that the freehold sale of new or partly completed office blocks, factories, warehouses and industrial units would all be standard-rated.

VATA 1994, Sch 9, Group 1, Item 1(a), Notes 2 and 4

A building will be treated as 'new' for the first three years from the earlier of:

  • the date that the certificate of practical completion

More on Supplies of land and property: