Reduced rate of VAT and Barn Conversions

As per VAT Notice 708, a conversion of a barn is a qualifying conversion as a “non-residential building into residential dwelling”. In such circumstances, the VAT liability may be applied at the reduced rate of 5% VAT for any renovation costs incurred for the conversion of a barn into a holiday let.

The following conditions must be met for the reduced rate of VAT to apply:

• The property must not have been used as a dwelling before the conversion
• The planned conversion must be to provide “Self-contained living accommodation”
• Statutory planning consent must have been granted and the conversion must be carried out in accordance with the planning consent Services eligible for reduced rate VAT
• Main contract (building contractor) work for the fabric of the barn
• Materials supplied by the building contractors with their conversion service
• Provision of water, power, heat or access
• Provision of drainage and other services related to waste disposal Services not eligible for reduced rate VAT
• Building material purchased separately i.e. not supplied by the building contractor
• Purchase and installation of carpets and fitted furniture
• Dismantling of scaffolding
• Hire of equipment
• Landscaping
• Professional services; architect, surveyor, consultant and supervisors

Give us a call on 01380 723692 or send us an email if you're thinking of converting a barn and need some VAT advice.