zero rated building work

Forum Categories VAT ON PROPERTY TRANSACTIONS zero rated building work

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  • #55457

    hi All
    I’m a builder and I want to understand when do I zero-rate my supply? What happens if I install goods with my services – can I zero-rate the goods as well? Does this matter if I’m a subcontractor?

    Hope you can help


    Here’s a quick summary of zero, reduced and standard rated work:


    -applies to NEW & QUALIFYING BUILDINGS below:

    1. Construction of a dwelling (house or flat)
    2. Construction of a building solely for a RELEVENT residential purpose (“RRP”) (nursing home, school buildings, student accommodation etc)
    3. Construction of a building solely solely for a RELEVENT charitable purpose (“RCP”).

    – materials on their own are standard rated. However, materials supplied with labour is zero rated. White goods like fridges are not zero-rated – only goods that are incorporated into the buildings are zero-rated.
    – Professional fees like architect fees are always standard rated.
    – However, design & build contracts where both the design and construction is under a single form of contract allows zero-rating of such services.

    You can also zero rate when:

    • Supplying or installing goods for a disabled person in their own home
    • Making alterations to suit a disabled person


    • Converting a building into a house or flat
    • Renovating or altering an empty house or flat
    • Supplying and installing mobility aids for elderly people
    • Supplying and installing certain energy saving materials and equipment
    • Supplying and installing certain heating systems and security goods when grant funded
    • Connecting or reconnecting to the mains gas
    • Converting a residential property into a different residential use – eg a house into flats


    • All other construction work including for example,
    • Building an extension, annex or granny flat
    • Loft conversions
    • Repairs and renovations

    If you are working on a building that will be for mixed use then you have to account for VAT separately e.g. a shop (SR) with a flat over (ZR).

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