Commentary

V5.164 VAT refunds for buildings constructed otherwise than in the course of business (DIY housebuilders)

Part V5 Compliance, enforcement and appeals

V5.164 VAT refunds for buildings constructed otherwise than in the course of business (DIY housebuilders)

V5.164 VAT refunds for buildings constructed otherwise than in the course of business (DIY housebuilders)

This paragraph examines the VAT refund scheme for buildings constructed otherwise than in the course of business (also known as the DIY housebuilders scheme or the DIY builders scheme).

DIY housebuilders—conditions for refund under the scheme (goods)

Under VATA 1994, s 35(1) and (1A) a person is entitled to a refund of tax (including payment of amount equal to VAT in accordance with the law of another member state where relevant1) if all of the following apply2:

  1.  

    •     the person carries out works consisting of one of the following:

  2.  
    1.  

      –     the construction of a building designed as a dwelling or number of dwellings

    2.  

      –     the construction of a building for use solely for a relevant residential purpose or relevant charitable purpose

    3.  

      –     a residential conversion

  3.  

    •     the carrying out of the works is lawful

  4.  

    •     the carrying out of the works is otherwise than in the course or furtherance of any business

  5.  

    •     VAT is chargeable on the supply, acquisition or importation of any goods used by the person for the purposes of the works. This reference includes VAT chargeable on the supply of goods in accordance with the law of another member state3.

  6.  

    •     the person makes a claim for a refund

DIY housebuilders—conditions for refund under the scheme (services)

A person is also entitled to a refund of tax where the following apply4:

  1.  

    •     a person ('the relevant person') carries out a

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