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bigduckontax, Accountant
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We are carrying out the elctrical installation and air

Customer Question

Hi. we are carrying out the elctrical installation and air conditioning installation at a new rebuild house.
As in the house was demolished and then rebuild.
The house has got a basement as a separate flat with a separate entrance to the basement.
Does that qualify for zero rated.
and if yes does Air conditioning qualify as well?
Thanks.
Joe.
Submitted: 10 months ago.
Category: Tax
Expert:  bigduckontax replied 10 months ago.

Hello Joe, I am Keith, one of the experts on Just Answer, and pleased to be able to help you with your question.

This is not a zero rated supply. VAT Notice 708 states that such work might be at the reduced rate of 5%. However, whilst the electrical installation clearly comes under Section 8 of the notice, the air conditioning element and work connected therewith would be standard rated.

You will have to issue VAT invoices appropriately apportioned.

A tad complex, I regret, but that appears to be the law on the subject.

Customer: replied 10 months ago.
Thanks for the answer.I will just have to show the client the reason why its not zero rated.
Can you please provide me with that?And please clarify again whats at 5% and whats at zero rated.Also the air conditioning is an air heat pump unit which should be 5% regardless.Please try to clarify this as best as possible and also the reasons why it is or isn't. as i will have to deal with the client about this.Thanks in advance.Joe.
Expert:  bigduckontax replied 10 months ago.

Have a look at VAT Notice 708 which you can find here Joe:

https://www.gov.uk/government/publications/vat-notice-708-buildings-and-construction/vat-notice-708-buildings-and-construction

Paragraph 2.1 is the relevant bit. You will see that the building involved attracts the 5% reduced rate of VAT, not zero. If the equipment being installed does indeed comprise an air heat pump then the reduced rate of 5% would also be relevant as central heating.

Please be so kind as to rate me before you leave the Just Answer site.

Customer: replied 10 months ago.
Thanks for the quick reply.I still don't see why he's not qualify for the electric for the zero rated.
23/09/2016 10:02Customerbigduckontax Tax Professional
Have a look at VAT Notice 708 which you can find here Joe:https://www.gov.uk/government/…Paragraph 2.1 states
Construction of new qualifying dwellings and communal residential buildings, and certain new buildings used by charities. 0 rated..My question is does a new house that has been fully demolished qualify?
and if it does, are there any conditions in regards ***** ***** long it had to be demolished? and does the fact that it has a separate flat basement disqualify him from the 0 rated?
Expert:  bigduckontax replied 10 months ago.

Well I see your point that it might come under Section 3 and be zero rated. Have a look at Paragraph 3.2 of the notice. If the facts of the case comply with this then a zero rating would be appropriate.

Customer: replied 10 months ago.
sorry to be so straight but im not a VAT expert and i don't quite understand how to read it.. isn't why i pay to get a proper answer ? i can just tell you the facts.1. the house has been fully demolished
2. its been demolished for a 2 years.
3. its being rebuild now with 1 main house and a basement flat. for domestic use only.4 we installing all the electrics.
5. we installing all the air heat pump units.I need to know does it qualify for 0% or 5% or non.sorry but i can't really understand from the hmrc website.
Expert:  bigduckontax replied 10 months ago.

From the position now reached these supplies are zero rated as the building is a qualifying one.

I do accept that VAT Notice 708 is extremely complex as HMRC tries to block as many loopholes to zero and reduced rates a possible..

Customer: replied 10 months ago.
Thanks.
Well your the expert :)
Expert:  bigduckontax replied 10 months ago.

Delighted to have been of assistance.

Please don't forget my rating.

bigduckontax and other Tax Specialists are ready to help you
Expert:  bigduckontax replied 10 months ago.

Thank you for your support.

Expert:  bigduckontax replied 5 months ago.

Post to clear my question list.

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