The following Value Added Tax guidance note by Tolley provides comprehensive and up to date tax information covering:
This guidance note looks at the zero-rating of construction services for certain new buildings.
For an overview of the liability of construction services more broadly, see the Overview ― construction, conversion and renovation guidance note.
Detailed commentary on the legislation and case law can be found in De Voil Indirect Tax Service V4.238.
Businesses can zero-rate supplies ‘in the course of construction’ of the following kinds of new buildings:
VATA 1994, Sch 8, Group 5, Item 2
In some circumstances, it will be necessary to hold a zero-rating certificate in order to be entitled to zero-rate the supply. There are also a number of types of service which are specifically excluded from the zero-rating for construction services.
This is explored further in this guidance note.
The word ‘building’ has not been defined in the legislation. HMRC’s view is that in the absence of a legal definition, it should be given its natural meaning, ie:
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