For those who are VAT registered.

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Just doing an invoice and I thought I'd mention part of the VAT regs that some may not be aware of.

Notice 708 deals with eligibility for construction work to be rated at 0% or 5% when you're invoicing. The bit that I'm using on this invoice is for a property that was unoccupied for more than 2 years prior to work starting being rated at 5%.

There are a range of things that may be applicable to some on here, and this is a link to the info. https://www.gov.uk/government/publi...n-or-alteration-of-empty-residential-premises

Worth noting because even if your accountant does your VAT return they aren't always aware of it. It's a nice easy 15% win for you as you pay VAT at full rate, but HMRC only get the 5% you charge. (y)
 
imago said:
Just doing an invoice and I thought I'd mention part of the VAT regs that some may not be aware of.

Notice 708 deals with eligibility for construction work to be rated at 0% or 5% when you're invoicing. The bit that I'm using on this invoice is for a property that was unoccupied for more than 2 years prior to work starting being rated at 5%.

There are a range of things that may be applicable to some on here, and this is a link to the info. https://www.gov.uk/government/publi...n-or-alteration-of-empty-residential-premises

Worth noting because even if your accountant does your VAT return they aren't always aware of it. It's a nice easy 15% win for you as you pay VAT at full rate, but HMRC only get the 5% you charge. (y)
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quite literally a tip that is worth £1000s to someone :D
 
Danny said:
quite literally a tip that is worth £1000s to someone :D
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Hopefully. It's also the reason (or one of them) why people form Ltd Co's for some specific projects. Buying a barn to convert, derelict property, commercial building etc. The individual buys the property, forms a company and pays it to do the work. Capital gains tax is reduced because you have a large invoice. You pay 5% VAT to the company on the invoice, the company gives that 5% to HMRC and pockets the 15% change. A large-ish job worth say £200,000 and you're better off to the tune of £30k.

Sadly they sometimes also fold the company owing trades and suppliers., but I suppose there's always some w4nker who takes it too far.
 
Yeah I have heard of that in the past I think you have said it before maybe?

Either way a good accountant should be able to advise as well :D
 
youve lost me here

job worth say 100k ex vat
i charge 5% Vat
so job is 105k..

I pay vat man the 5% the 5k..
i end up with 100k...

where is this 15% ?
 
mikeadams1985 said:
youve lost me here

job worth say 100k ex vat
i charge 5% Vat
so job is 105k..

I pay vat man the 5% the 5k..
i end up with 100k...

where is this 15% ?
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Everything you buy for the job has 20% VAT added to it, so if the materials cost is £60k then £10k is VAT. Your VAT return then shows £10k paid out, £5k taken in which means HMRC pay you £5k. (y)

If the job doesn't qualify for VAT reduction you pay £10k on VAT, and you charge 20% on the £100k = £20k. Which means you have to pay HMRC £10k. :(
 
imago said:
Everything you buy for the job has 20% VAT added to it, so if the materials cost is £60k then £10k is VAT. Your VAT return then shows £10k paid out, £5k taken in which means HMRC pay you £5k. (y)

If the job doesn't qualify for VAT reduction you pay £10k on VAT, and you charge 20% on the £100k = £20k. Which means you have to pay HMRC £10k. :(
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How do we know which job's do and don't qualify buddy?
 
Builderboi said:
How do we know which job's do and don't qualify buddy?
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Have a look at the link in my first post, there's a fair few types that do. It's not a long read as it's just a notice that lists the relevant bits and bobs.

It's also worth having a word with your accountant to make sure he's aware of it.
 
imago said:
Have a look at the link in my first post, there's a fair few types that do. It's not a long read as it's just a notice that lists the relevant bits and bobs.

It's also worth having a word with your accountant to make sure he's aware of it.
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Thank you, I sure will be!
 
There's so many exemptions with vat,
Recently we insulated and rendered a church. Normally an insulated render system is 5% vat but a church is classed as a business now, so its20% as it's not a domestic dwelling, Some of it was a new build extension so I had to rate it at 0% so I had 2 separate vat rates for the 1 job.
 
owls said:
There's so many exemptions with vat,
Recently we insulated and rendered a church. Normally an insulated render system is 5% vat but a church is classed as a business now, so its20% as it's not a domestic dwelling, Some of it was a new build extension so I had to rate it at 0% so I had 2 separate vat rates for the 1 job.
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I had a similar deal with an extension a couple of years back. Full width single storey extension, one half making the lounge bigger, the other a bedroom for a disabled woman. 20% on the lounge part, 0% on the bedroom part.
 
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