Buildings and construction ― self-supply charge for internal construction projects

By Tolley
Buildings and construction ― self-supply charge for internal construction projects

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

  • Buildings and construction ― self-supply charge for internal construction projects
  • When does a self-supply charge arise?
  • What are the ‘specified’ services which lead to the charge?
  • How is the labour valued?
  • How is the self-supply charge accounted for?
  • Practical points around the self-supply charge

This guidance note provides details of a self-supply VAT charge that can arise where a business uses its internal labour to undertake certain construction works.

In-depth commentary on the legislation can be found in De Voil Indirect Tax Service V3.244.

When does a self-supply charge arise?

A self-supply charge arises where the following conditions are met:

  • a business provides ‘specified’ construction services
  • the services are provided for the business itself (or its VAT group)
  • the business uses its own internal labour
  • the open market value of the labour would be at least £100,000 (excluding the value of any services which would be zero-rated if supplied by a contract builder)

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