DIY House Builders and making a claim

The process of building or converting a property can be costly, and the VAT implications can add to the already substantial expenses. Fortunately, a special DIY house builders VAT Refund Scheme is available and those converting non-residential buildings into dwellings. This scheme allows eligible individuals to reclaim VAT incurred on construction or conversion costs, but it's important to note that it's only applicable when the building will be used for a non-business purpose.

VAT consultants for DIY house builders

At Solve VAT, we understand that the DIY house builders scheme can be complex and confusing, which is why we offer our VAT expertise to help our clients secure the maximum VAT refund on their projects. We advise on complex legal points that may prevent a successful claim and also prepare and submit the DIY house builders claims on behalf of our clients.

When it comes to builders’ services, they’re usually zero-rated in connection with the construction of a new dwelling. However, if the owner purchases materials directly, VAT will be incurred on those items. Similarly, where a non-residential building is converted into a dwelling, zero-rating is unlikely to be available, and construction costs are likely to carry VAT at 5%.

How long it takes HMRC to process DIY house builders claims

Claims online

HMRC will write to you within 2 weeks to tell you your DIY house builders claim reference number. HMRC may also ask you any questions they have about your claim.

We understand that HMRC aim to process a claim within 3 weeks after they have received all information needed from a claimant. If a DIY house builders claim is successful, HMRC will write to tell you when you can expect to receive your VAT refund from the National Payment Centre.

Claims by post

HMRC will write to you within 4 weeks to tell you your DIY house builders claim reference number and they may also ask you any questions about your claim. HMRC aim to process a claim within 6 weeks after they have received all of the required information.

Claims rejected or not paid in full by HMRC

If a DIY house builders claim is rejected or not paid in full, HMRC should tell you the reasons why. If you do not agree with the decision provided by HMRC, you can either:

ask for the decision to be reviewed by an HMRC officer not previously involved in the matter
appeal to an independent tribunal

If you ask for a review you can still appeal to the tribunal after the review has finished. Our VAT specialists can assist you in this process.

Time limits

It’s important to note that claims for the DIY house builders VAT Refund Scheme must be completed and submitted within a strict time limit, which can be difficult to meet when combined with the other challenges that come with self-build or conversion projects. Our team at Solve VAT is well-versed in this area and can guide our clients through the DIY house builders process.

We keep a close eye on the VAT Tribunals’ decisions, particularly those involving rejected DIY house builders claims. In response to this HMRC issued Revenue and Customs Brief 8 (2022) https://www.gov.uk/guidance/vat-refunds-for-new-builds-if-youre-a-diy-housebuilder clarifying their policy that only a single claim is allowed under the DIY house builders Scheme. However, where it’s agreed that a claim has been repaid in error, HMRC will accept a subsequent claim with evidence that the claim has been made within three months of completion.

Our VAT consultants for the DIY housebuilder scheme always strive to provide our clients with the most up-to-date and relevant information to ensure they receive the maximum VAT refund available.