Research carried out by Homebuilding & Renovating magazine suggests that as many as one in four self-builders may be owed a rebate from HMRC, to the tune of around £30,000 for every self-build project that has not been claimed against.
Approximately 10,000 homes in the UK are built by self-builders each year, and while claiming VAT back on building materials for your project is relatively straightforward, many self-builders do not think to check whether they can claw back any of their VAT bill, perhaps because the process is a one-off for the vast majority of them.
With the UK government saying it wants the number of self-builders to increase to 20,000 by 2021 (through the Right To Build initiative), Newby Castleman is encouraging those building their own home to contact them to see if they can help them to reclaim money that is rightfully theirs.
Brent Goodwin, VAT Manager for Newby Castleman, said, “The dream of building your own home is becoming a reality for more people, and with the continued success of TV shows like Grand Designs this trend doesn’t show any signs of stopping.
“However, the research we have seen suggests that many self-builders may be owed a VAT rebate from the Taxman, and in many cases this may be a considerable amount, due to the large amount of capital one must put into such a dream project.
“To qualify for such a rebate, there are a number of rules that apply; for example your property must be a self-contained premises for personal use, so you can’t run a business from there or rent it out to tenants, plus you wouldn’t be able to claim on some professional costs, or some household items.
“There are several avenues one can take to reclaim your VAT as a self-builder, but it is essential that any claim is submitted within the strict time limits, otherwise HMRC will reject it in part or in whole. For expert advice on the matter we would encourage you to speak to a professional accountant.”