The following Value Added Tax guidance note Produced by Tolley provides comprehensive and up to date tax information covering:
IP COMPLETION DAY: 11pm (GMT) on 31 December 2020 marked the end of the Brexit transition / implementation period entered into following the UK’s withdrawal from the EU. At this point in time, key transitional arrangements came to an end and significant changes began to take effect across the UK’s VAT and customs regime. This document contains guidance on subjects potentially impacted by these changes. Before continuing your research, see the Brexit — overview guidance note.
This guidance note examines the exclusion from the zero-rating for construction services that applies to the following kinds of works performed on existing buildings:
enlargements (unless they create additional dwelling(s))
extensions (unless they create additional dwelling(s))
constructing annexes (except certain charitable annexes)
VATA 1994, Sch 8, Group 5, Notes 16(b), (c), 17
This should be read alongside the Construction ― zero-rating of construction services guidance note which sets out the scope of zero-rating for construction services.
In-depth commentary on enlargements, extensions and annexes can be found in De Voil Indirect Tax Service V4.232I (enlargements and extensions) and De Voil Indirect Tax Service V4.232J (annexes).
As these kinds of construction services are excluded from zero-rating, they will generally be standard-rated, although some works may qualify for reduced-rating. For reduced-rated construction services, see the Conversion ― reduced-rating conversions to different residential use and Renovations and alterations ― reduced-rating works on empty homes guidance notes.
The meaning of an ‘existing building’ in this context is as described in the Construction ― conversion, reconstruction and alteration of existing buildings guidance note.
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