Claiming Vat On Boreholes/grouting Work
Posted 05 October 2015 - 02:28 PM
Posted 05 October 2015 - 02:59 PM
The borehole drilling work and surveying isn't eligible for VAT reclaim or zero rating, as far as I know, as it doesn't form a part of the material structure of the house.
It is probable that you may be able to argue that grouting the boreholes under the house footprint forms an intrinsic part of the foundation work, so could be considered as ground works and so is OK for zero rating for VAT.
VAT reclaim for self-builders is a bit of a minefield, though, and is full of seeming inconsistencies, but I'm certain that the surveying element wouldn't be eligible, as I looked at this in detail when we had a hydrogeological survey to determine the underlying formations.
If the grouting work quote includes VAT, then send the company a VAT certificate (like this: VAT Exemption Certificate.pdf 20.41K 154 downloads ) with your planning permission details etc and get them to quote on the basis that the grouted boreholes form a structural part of your underpinning foundation work, to make the work eligible for zero rating. You may have to discuss this with them, as they may not be fully aware that they should zero rate work that forms an intrinsic part of a new build. If you pay the VAT, then unfortunately you cannot reclaim it.
Hope this helps, Colin (temp on here) knows more about VAT than I and may add to, or correct, my views above.
Edited by jsharris, 05 October 2015 - 03:00 PM.
Posted 05 October 2015 - 05:29 PM
Posted 05 October 2015 - 10:59 PM
In general you reclaim VAT on materials using VAT 431NB. However most labour should be zero rated to you in the first place (eg not paid and reclaimed). VAT 708 tells tradesmen and other professionals what rate they should charge you for work on a new house or similar project.
There is a section in VAT Notice 708 which covers work "closely connected" with the construction of a new dwelling. It includes enabling work such as demolition. Pretty sure it would cover grouting to stabilise the land..
See section "3.3.4 Work closely connected to the construction of the building"
Subject to sub-paragraph 3.3.6, your work is closely connected to the construction of the building when it either:
(a) allows the construction of the building to take place, such as when you:
•carry out ground works (including the levelling and drainage of land) as part of the process of constructing a new building or buildings in its place
It is not possible to produce an exhaustive list of services that are closely connected to the construction of the building, and each case not included above must be looked at on its own merits.
It sounds like grouting should be covered several ways. I would insist the company re-quote without VAT because if VAT is charged in error you cannot reclaim it using VAT 431.
Posted 05 October 2015 - 11:04 PM