Changes to the VAT DIY Housebuilders scheme

The VAT DIY Housebuilders scheme is a special scheme that enables homeowner building a home to benefit from the special VAT rules that allow the qualifying construction costs of new homes and certain conversion works to be zero-rated. The scheme has been designed to effectively place homeowners in a similar position to a property developer.

It was announced as part of the Spring Budget 2023 measures that the government would legislate to digitise the VAT DIY housebuilders’ scheme and also extend the time limit for making claims from three to six months. These changes will now come into effect on 5 December 2023 for claims made on or after that date. The existing process for making paper-based claims will remain as an option for those that wish to use it.

A claim can be made for qualifying building materials on which VAT has been charged. Qualifying materials include most materials incorporated into a new building or conversion and which cannot easily be removed. There are a number of exceptions including fitted furniture, carpets, and certain domestic appliances.

There are also time limits that should be followed when making a claim. Currently, a claim must be made within three months of the completion of the conversion or new building using the appropriate form. A repayment is typically made within 6 weeks of a successful claim being submitted.

If you need help with VAT, please give our team a call on 01380 723692.