The following Value Added Tax guidance note Produced by Tolley provides comprehensive and up to date tax information covering:
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.
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 goods are seen as ‘ordinarily incorporated’ into a building for these purposes is described later in this guidance note.
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.
HMRC’s views on a number of commonly seen articles are set out in Notice 708, section 13 and VCONST13600.
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