Builders VAT Rate

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O
Old Timer
5 Posts
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A question on VAT rates referencing this web page: https://www.gov.uk/vat-builders

I have an HMO that I let exclusively to students. The property is a conversion from a 3-bed terrace to a 6-bed HMO.

The builders who conducted the conversion work charged 5% VAT as the work they were doing qualified for reduced rate VAT (see web page for details).

I now am about to embark on additional building work to the property which is now fully functional student accommodation. 'Student accommodation' is one of the other property types listed where VAT may not be charged, however, I'm assuming as an HMO the property is still classified as 'a house' (after all, it's in the name) and therefore even though it is 'student accommodation' it does not qualify for zero VAT because it is still 'a house' and the zero VAT rate applies to 'Buildings that aren't houses or flats'.

I am about to go back to the builder to haggle on the costs quoted for the additional work. The conversation about whether they should charge VAT or not should be an interesting one.

Does anyone else have any experience of such a situation with a student property and persuaded a building firm to not charge VAT?

Cheers
OT

30/05/2018 21:11

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