VAT Claim Advice
Whether you use Allsorts or not, here's some advice about preparing your VAT claim.
The single most important bit of advice is about time, do not run out of it. You get no more than 90 days from the date of your completion certificate, to submit your claim. Don't wait until the end of your project before starting to prepare the paperwork, start now. Have everything ready for the day you receive your Completion Certificate.
Incredibly, I've recently met two Self Builders who were not planning on reclaiming their VAT. The first person said 'it all seems too complicated', the second said 'it wasn't worth it'. It's not complicated at all if you use Allsorts and it most definitely is worth it. If you don't want to use Allsorts, and feel the process it too complicated, then either use our VAT Reclaim Service or pay an accountant to do the work for you. The average claim, from my experience, works out to be just under £8,000. Amy and I prepared the claim for the person that didn't think it would be worthwhile and got him a refund of £7158.80 (we charged him £400) - leaving him with £6758.80 of 'free money'.
Make sure you include the original invoices & receipts with the claim forms. The VAT office will probably either return your claim unpaid, or deduct the VAT from any invoices that are not originals.
You don't need to send in your claim with forms sent to you by HMRC. You don't even need to register with the VAT office. Everything you need can be downloaded from www.hmrc.gov.uk (search for DIY). Alternatively, make it easy for yourself and download the forms from the bottom of this page.
When preparing the Part 2A form. Complete the top section that requests info like 'number of floors', 'Ground floor area' etc. If you're using Allsorts, mark the 'Quantities & Materials' section with something like 'Please see separate sheets' and include the Part 2A report that Allsorts will print for you. If you're not using Allsorts, you will need to prepare a list of the material you used on your build.
If you download the Part 1 form, include all 4 pages of it with your return (not just page 1).
Any trades you use on your build, should not charge you VAT for their labour (labour on new builds is zero-rated), so don't let them. The VAT people will not repay VAT that has been incorrectly charged. Your supplier must correct this with you, and then correct it with the HMRC.
When preparing the Part 3 & 4 lists, that detail your invoices, items and VAT charges. List the invoices in date order, oldest to newest - Allsorts will do this automatically for you. Put the original invoices in exactly the same order as they are listed.
Any credit notes should be placed in your claim pack separately from the invoices. Show any items that have been paid for, and then had the payment credited back to you, on your Part 3 & 4 listings. Something like this ...
Highlight the credits so they can be easily seen. Allsorts will highlight credits like this, making it easy for the VAT office to identify them.
If you're not using Allsorts, keep your paperwork neat and easy to read. The VAT people are busy and will have targets to meet. Making things easy for them will help them get through your claim quicker and get your cheque in your bank sooner.
Splash out on some folders and some index cards. Separate the sections as follows ...
Section 1
- Completion Certificate
- Plans
- Planning Approval
- Take of schedule (if timber frame kit and if available)
Section 2
- Part 1 Claim Form (all 4 sheets if using the downloaded version)
Section 3
- Part 2 Claim Form
- Part 2 Quatities & Materials Lists
- Part 2 Kitchen Items Lists
Section 4
- Part 3 Claim Form
- Part 3 Listings
- Part 3 Invoices
Section 5
- Part 4 Claim Form
- Part 4 Listings
- Part 4 Invoices
Section 6
- Credit Notes
Don't expect the claim forms or your lists to be returned to you, the VAT office keep them. Do expect your invoices and receipts, plans etc., these are yours and will be returned when the VAT people have finished with them.
Any invoice over £100 must have the claimants name and address on it. If you buy something from, say, B&Q for more than £100. Take the till receipt to the Customer Services Desk and ask them for a VAT receipt that has your name and address on it. Shops will do this for you and the VAT you get back is worth this little bit of hassle. Failing that, pay for these items with a credit or debit card and include the payment slip with the receipt. For every £100 you spend, £14.89 is VAT.
All invoices that have VAT charges, must have the suppliers name and VAT number on it. If it doesn't, the supplier is actually breaking the law. So check your invoices and correct things before you send in your claim.
Include a set of scaled plans with your claim and also the original planning approval for your build. This proves you're entitled to use the VAT Refund scheme.
Send your claim to the VAT office (address below) Special Delivery. It's expensive, but what if the good old Royal Mail loose your invoices ? Don't take the chance for the sake of saving a few quid - it could cost you thousands.
DIY Claims
HM Revenue & Customs
2 Broadway
Broad Street
Five Ways
Birmingham
West Midlands
B15 1BG
If you have any questions not answered here. Phone the HMRC National Advice Line on 0845 010 9000 (option 2 - VAT). They are not ogres, and are genuinely helpful people with good advice.
Self Builder VAT Reclaim Forms - (taken from the HMRC website)
Part 1
VAT Information booklet