Services provided by VAT registered contractors
Contractor's work on new build projects should be zero rated VAT.
Contractor's work on conversions should be charged at the reduced 5% VAT rate.
Contractor's work on listed conversions should be zero rated VAT.
Services provided by contractors who are not VAT registered
The contractor will pass on the VAT he has paid on the materials he has bought, you cannot reclaim this. Try to buy the materials yourself.
Lump sum quotations and charges
Always make sure that you have schedules and descriptions to show what is involved.
Transport or Delivery
Transport and haulage charges are not refundable, however, delivery charges are allowed.
Whilst plant hire charges are excluded from the claim, where an operator is provided by a VAT registered contractor the charge should be in accordance with the rules for service providers (See paragraph 1, above), this may result in lower final cost.
Moving in before completion
This is normal, keep a copy of the first Council Tax assessment/valuation as the occupation date is important. You don't have to do all the work yourself and you don't have to live in the completed property. However, be aware of capital gains tax implications.
How long before the refund is paid?
HMRC aim to acknowledge receipt of a claim within 10 working days and normally state the expected time they require for processing. I can to advise on their current period.
Problems with overcharging:
”Do not wait until your project is finished before ensuring that you have been charged the correct rate of VAT. A VAT registered trader's time limit to correct liability is restricted to 3 years from the time of supply”.