VAT Self Build DIY Claim Online Submission

As part of HMRC’s continuing mission to move taxpayer interactions online and away from telephones and post, HMRC have announced the “digitisation of the self-build DIY claim process” this week, although the traditional paper format is still available for those not ready for the digital revolution.

Background of the VAT Self Build DIY Scheme

The VAT self build DIY scheme exists to place an individual who is building (or converting) their own home, in the same VAT position as if the individual had purchased the house from a property developer.

When engaging with a builder/contractor in the construction of a new build dwelling (or conversion into a dwelling), the builder/contractor would zero rate their supplies of labour, and also materials when installed by the contractor (labour).  With the DIY scheme, the individual can reclaim VAT on the costs of building materials they have purchased themselves.

The individual can then submit a claim to HMRC at the end of the project, with HMRC refunding the individual the VAT element on the cost of those materials purchased.  The individual would complete a form VAT431NB (for new builds) and form VAT431C (for conversions). 

The VAT self build form has a series of questions to ensure the conditions for a claim are met and includes a number of pages to list all of the individual purchase invoices (date, supplier name, description of supply, total paid, etc.) and each claim is supported by submitting original invoices and receipts for each and every transaction/purchase listed.

A claimant can only make one claim to reclaim self build VAT and that claim must be made within 3 months of the building having been completed. 

Recent announcements by HMRC on the Self Build VAT DIY Scheme

HMRC have announced that from Tuesday 5th December 2023, applications for the VAT self build DIY claim can be submitted electronically, although they can also be submitted manually/via the post.

In addition to the digitasation of claims, HMRC will extend the time limit for making a claim.  The current 3 month deadline from completion will be extended to 6 months from completion. 

The incoming changes will also see the list of documents required to be submitted at the time of the claim to omit invoices, but include such evidence relating to the residential conversion from a derelict building or shell as may be specified by HMRC

It is not yet known whether the applicant will need a government gateway account or if they can file using an online form linked to an email address/password login.

The opportunity to file online should improve accuracy of submissions which in turn should mean faster turnaround times, although this close to Christmas, the proof will be in the pudding.

Get in touch

If you require any help with using the VAT self build claim scheme or making a digital claim, or wish to discuss your personal VAT matters, please get in touch with our VAT expert who will be happy to assist you further.

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