A business can zero rate the construction of certain buildings, subject to relevant conditions. This document covers this in detail, together with the demolition and party walls; HMRC’s information sheet; evidence; constructions incorporating existing buildings; treating relevant residential purpose buildings as dwellings; sub-contractors; extending existing buildings; relevant charitable purpose buildings; services that can and cannot be zero rated; and mixed site developments..

Points discussed within this guidance note:

> Conditions to zero rate the construction

There is a new build vat exemption on certain buildings. There is zero rated vat on new builds which are designed as a dwelling, will be used solely for a relevant residential purpose or will be used solely for a relevant charitable purpose, so long as certain conditions are met which are set out in this note.

>> Basic conditions

>> What buildings can be constructed at the zero rate?

>> What is a zero-rated construction?

>> Demolition and party walls

> HMRC VAT Information Sheet 07/17

Where buildings make use of or keep parts of a building that stood on, or adjacent. Where buildings make use of or keep parts of a building that stood on, or adjacent to, the site where the construction works are undertaken, HMRC has issued additional guidance.

>> Evidence needed that facades are being retained as a condition or requirement of specific planning consent (SPC)

>> Construction of buildings that incorporate existing buildings

> Treating relevant residential purpose buildings (RRP) as dwellings

>> Creating additional facilities

>> Change of use

>> Care homes

>> Pennine Care NHS Trust

>> Care packages including accommodation

>> Subcontractors

>> Construction of new student accommodation

> Extending and enlarging an existing building

> Relevant charitable purposes

>> What is an annex?

>> HMRC v Longridge on the Thames

> Services in the course of construction

>> Civil engineering works

>> When is a building completed?

>> Snagging

>> Services provided before or after construction

> Services that cannot be zero-rated

>> Architects, surveyors, consultants and supervisor

>> Hiring goods

>> Goods used for private / non-business purposes

> Mixed site developments


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