The following Value Added Tax guidance note by Tolley provides comprehensive and up to date tax information covering:
This guidance note explains when works in converting premises to different residential use can qualify for the reduced rate of VAT.
For an overview of the liability of construction services more broadly, see the Construction ― zero-rating of construction services guidance note.
In-depth commentary on the legislation and case law around reduced-rated conversions is found in De Voil Indirect Tax Service V4.411.
Conversion works will generally never qualify for the zero-rate of VAT (see the Construction ― conversion, reconstruction and alteration of existing buildings guidance note) with the exception of certain conversion works supplied to housing associations (see the Conversion ― zero-rating non-residential conversions (housing associations) guidance note).
However, some conversion works can qualify for the reduced rate of VAT, provided the following conditions are met:
VATA 1994, Sch 7A, Group 6, Item 1
These conditions are explored further in this guidance note.
There are three different types of qualifying conversion:
VATA 1994, Sch 7A, Group 6, Note 2
Each type of conversion is described in turn below.
A changed number of dwellings conversion takes place when:
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