Search News


 

News

Lloyd & Co
Chartered Accountants

103-105 Brighton Road
Coulsdon
Surrey, CR5 2NG
020 8668 0500
This email address is being protected from spambots. You need JavaScript enabled to view it.

Source: HM Revenue & Customs | | 15/05/2018

Whilst the majority of businesses charge VAT at the standard rate of 20% there are a number of different VAT rates and exemptions that businesses should be aware. There are actually three separate VAT rates, the standard rate of 20%, the reduced rate of 5% and a zero rate. The reduced rate of VAT applies to the supply of certain goods and services.

In this article we will look at situations when the reduced VAT rate can apply to the conversion of a premises. This can happen where the number of dwellings in a property, after a conversion, changes from the number of dwellings before the conversion. For example, the conversion of a non-residential building into residential property is eligible for the reduced rate. (e.g. converting a restaurant into a house, or a warehouse into a block of apartments).

The reduced VAT rate of 5% will apply to qualifying services provided as part of a property conversion. These might include:

  • Repairs and maintenance (such as redecoration), or
  • Improvements carried out to the fabric of the building (such as the construction of an extension or the installation of double glazing).

Services within the immediate site of the premises being converted can also be at the reduced rate if they are in connection with the:

  • means of providing water, power, heat or access;
  • means of providing drainage or security, or
  • provision of means of waste disposal.

Planning note:

However, HMRC’s guidance is clear that all other services are standard-rated. For example, you must standard-rate:

  • the installation of goods that are not building materials, such as carpets and fitted bedroom furniture;
  • the erection and dismantling of scaffolding;
  • the hire of goods;
  • landscaping;
  • the provision of professional services, such as those provided by architects, surveyors, consultants and supervisors.


Latest News

Low emission lorries to pay lower levies
17/07/2018 - More...
The government has confirmed plans to introduce a lower rate of the HGV road user levy for lorries that meet the latest

New points-based late filing penalties
17/07/2018 - More...
The Finance Bill 2018-19 draft legislation includes a new measure to introduce a points-based penalty system for certain

HMRC security deposit regime to be extended
17/07/2018 - More...
The security deposit legislation is to be extended to both Corporation Tax and Construction Industry Scheme (CIS)