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25/02/2010 |
Reduce Your Restoration Budget |
Are you planning your own restoration project? If so, do you know you could reduce your VAT bill by 12.5%? “Whether they are seeking to build their new life in the country or the town, few people involved in renovating properties know they are only obliged to pay 5% VAT if their building has been empty for at least two years,” says Carolyn Milburn of George F. White.
Despite being introduced in 2008 to encourage greater use and occupancy of empty buildings, few people including builders and contractors are aware of the VAT reduction for eligible premises. Compliance is relatively straightforward: the building must have been empty for at least two years prior to the start of any work and must be intended solely for a “relevant residential purpose”. The ruling also applies to conversions of properties such as barns into residential dwellings provided that they have been empty for at least ten years.
As Carolyn explains, “Being aware of this ruling can add up to substantial savings when restoring a property as it applies to both building materials and building costs, the only exception being scaffolding. Obviously, you need to be able to prove that the property has been empty but provided you have good records, it is relatively simple. Often projects such as these run over budget or there are unforeseen costs so any help with reducing costs is particularly welcome.”
George F. White has already been helping clients use this VAT relief to help make their renovation projects more affordable. “One client inherited a farmhouse which had been neglected and required £60,000 worth of work to bring it up to acceptable living standards. At the time the renovations began, the house had been empty long enough to benefit from the reduced rate of VAT allowing him to reduce his development costs on what is now a beautifully renovated farm house,” says Carolyn.
She continues, “The important thing to remember is that to claim the reduced rate, you must be able to prove it to the VAT office. This could be in the form of a dated letter from the council showing the property was empty or your council tax bills showing a reduced rate for empty premises. If you are employing a builder, plumber or electrician then you need to provide them with this written evidence. “
Further information can be found on the Customs and Excise website under Vat Buildings and Construction Notice 708 or by contacting Carolyn Milburn at the Wolsingham office of George F. White on Tel. 01388 527 966.
George F. White has offices in Alnwick and Tyne Valley in Northumberland, Wolsingham and Barnard Castle in County Durham, Bedale in North Yorkshire, Shiptonthorpe near York and Park Lane in London
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