Commentary

V7.368 Construction services—reduced rate supplies (subject to VAT at 5%)

Part V7 Tax planning
Part V7 Tax planning | Commentary

V7.368 Construction services—reduced rate supplies (subject to VAT at 5%)

Part V7 Tax planning | Commentary

V7.368 Construction services—reduced rate supplies (subject to VAT at 5%)

The main categories of construction work that can qualify for a reduced rate of VAT are as follows:

  1.  

    •     qualifying services supplied in the course of certain residential conversions, the main ones being where there is a changed number of units at the end of the project compared to the beginning, eg converting a detached house into two semi-detached houses (or vice versa)

  2.  

    •     qualifying services supplied when converting a non-residential building into a residential building, including a dwelling, eg office converted into flats

  3.  

    Note – work carried out for a housing association converting a non-residential property into a residential property is zero-rated. In the case of a non-residential building being converted, a further condition is that the property must not have been used for residential purposes in the ten-year period before the building work starts.

  4.  

    •     qualifying services supplied in the course of renovating and altering dwellings or relevant residential buildings that have been empty for two or more years

  5.  

    •     building materials and certain

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