The basic position is
that all work carried out prior to 1 October will still benefit from zero
rating, where applicable. Work carried out thereafter will be liable to VAT at
20%.
There are, however, a couple of variations/conditions:
Any work, for which
the contract has been placed, prior to 21st March 2012, will still
be zero rated up until 21 March 2013.
There will be anti-avoidance measures put in place, such that if someone invoices work in September (no VAT), but carries out the work after 1 October, HMRC will be able to charge 20% on that work. This would also apply if someone simply placed a deposit prior to October for work carried out afterwards.
Works unaffected that
still qualify for the 5% VAT rate:
- Empty for 2 years
prior to work starting.- Converting a property from two dwellings into one, or vice versa. In fact any conversion resulting in a different number of dwellings. Best example was one where a staff flat, which was not needed, all repair/refurb work changed from 20% to 5% VAT.
- Converting from commercial use to residential use.
We hope that this is
of help but if you’d like any other information please feel free to contact us.