Reduced Rate VAT

New builds normally attract zero rate VAT for building materials (those items that form the fabric of the building), and renovations which convert previously uninhabited buildings into residential properties normally attract reduced 5% VAT.

Wooden floors and doors are considered by the HMRC to be building materials for this purpose.

Items which are both supplied and fitted by the same company can be invoiced at zero or reduced rate. Items which are supplied by one company and fitted by another must be invoiced at standard rate and then the VAT paid over the applicable rate reclaimed by the property owner from the HMRC through a simple process at the end of the project.

The reason for this is to help prevent fraud because the fitter can ensure that the materials are being installed into the property that is eligible for the reduced rate, whereas a supplier cannot.

For further details about which products and services are eligible for reduced rates, and who can and cannot invoice them, please see HMRC Notice 708.

Prior to March / October 2012, alterations (not repairs) to listed buildings which required and had Listed Building Consent attracted zero rate VAT. With effect from October 2012 however, this relief was abolished and all work on Listed Buildings became subject to standard rate VAT.

We can export goods to most countries. Goods being exported outside the UK are eligible for zero rate VAT.

Proof of export from the carrier is required in order for the zero rate to be applied and goods will normally attract local VAT / duty at the point of entry to their destination and this may need to be paid before the goods can leave the port depending on local arrangements.

If Broadleaf are responsible for arranging the transport of export goods, zero rate VAT can be applied at the point of invoice. If the client is responsible for the export of the goods, then standard rate VAT will initially need to be charged and paid. This will be refunded upon supply of customs and transport documents proving export.