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Sam
Sam, Accountant
Category: UK Tax
Satisfied Customers: 6506
Experience:  26 HMRC expertise, PAYE, Self Assessment ,Residency, Capital Gains, CIS ask for Sam Tax
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Built a bungalow couple who's disabled father is going

Customer Question

built a bungalow for a couple who's disabled father is going to live in so the vat was o rated as it is new build.I am going to build a two storey extension for the couple on there house which in the garden is the fathers bungalow.They are saying that the extension is 5% vat rated because one of the doorways is bigger and toilet will suit his needs downstairs.he will not be living in the property as his new bungalow front door is 4metres away
Submitted: 2 years ago.
Category: UK Tax
Expert:  Sam replied 2 years ago.
Hi Thanks for your question- they are wrong - its standard rated as its NOT for the father to live there - its merely to allow the father to gain access to their property and use their facilities but does not fall into the remit of zero rated or 5% (as it does not fall into the 5% remit either If they refuse to accept this ask them to ring the VAT helpline for clarification on Let me know if I can be of any further assistanceThanks Sam Telephone: 0300(###) ###-####pening times:8am to 6pm, Monday to FridayClosed weekends and bank holidays
Customer: replied 2 years ago.
I am about to start for i have finished the bungalow .but i do not want to be liable for the vat
Customer: replied 2 years ago.
who would be liable?
Customer: replied 2 years ago.
hello sam could you answer the last two questions then i can go
Customer: replied 2 years ago.
Also Sam, because I had to build the bungalow for the father, I had to install a new septic tank to service it. However it
will also service the existing house and new extension when built. What VAT rate do I charge. I thought it would be zero rated
because of the bungalow but I am unsure now as it will service the house and proposed extension. Another thing, trenches
for the water, gas and electric have been dug ready for instalment. This is a separate to the house and extension. I am sure
this is classified as zero rated. Please can you confirm.
Customer: replied 2 years ago.
can you answer?
Expert:  Sam replied 2 years ago.
Hi Apologies for the delay - have a family to see to in between answering questions! The customer (so the couple whom you have completed the build for) is liable for this work on the main house. (and the CAT due) You are now asking for additional information than your original question suggested and as per Just Answer policy this should be listed as a new question (or phone the VAT helpline! as each supply falls under a different consideration for VAT purposes, and whilst there are potential zero rated positions here - this is more complex then just yes or no whether separate from the main house supply etc - more information would be needed) and as you also then go on and ask for other jobs undertaken then I am afraid I cannot even just give a brief pointer. (But see this excerpt from the VAT guide)3.3.4 Work closely connected to the construction of the buildingSubject to sub-paragraph 3.3.6, your work is closely connected to the construction of the building when it either:(a) allows the construction of the building to take place, such as when you:demolish existing buildings and structures as part of a single project to construct a new building or buildings in their place (please note that the granting of a right to remove materials is not the supply of demolition services and is standard-rated) * provide or improve an access point to a building site to allow deliveries to be madecarry out ground works (including the levelling and drainage of land) as part of the process of constructing a new building or buildings in its placeprovide site clearance or ‘builders’ clean’ servicessecure the siteOr,(b) produces works that allow the building to be used, such as works in connection with:the means of providing water and power to the building (this can extend to the work required to make the connection to the nearest existing supply)the means of providing within the development site access to the building (for example roads, footpaths, parking areas, drives and patios)the means of providing security (such as walls, fences and gates – but note that most electrical appliances are always standard-rated. Further information is in paragraph 13.6.)the provision of soft landscaping within the site of a building (such as the application of top-soil, seeding with grass or laying turf)Please note that the planting of shrubs, trees and flowers would not normally be seen as being ‘closely connected…’ except to the extent that it is detailed on a landscaping scheme approved by a planning authority under the terms of a planning consent condition. This does not include the replacement of trees and shrubs that die, or become damaged or diseased.It is not possible to produce an exhaustive list of services that are closely connected to the construction of the building, and each case not included above must be looked at on its own merits.Please note that you need not be the main contractor in order for your supplies to be considered to be ‘works closely connected…‘.You can be a subcontractor or another contractor.3.3.5 Work unconnected to the construction of a buildingExamples of work that is unconnected to the construction of a building include:the provision of on-site cateringthe cleaning of site officeslandscaping (other than the landscaping described in sub-paragraph 3.3.4)the provision of outdoor leisure facilities for a dwelling such as tennis courts and swimming pools (although the provision of a playground at a school would qualify as it is needed for the school to be used), andworks outside the site of the building (other than those described in sub-paragraph 3.3.4), including where that work is carried out under a ‘planning gain’ agreement with a planning authorityFurther information on planning gain agreements can be found in Notice 742 Land and property. This should help you determine whether zero rated or not ThanksSam
Expert:  Sam replied 2 years ago.
sorry VAT not CAT due
Expert:  Sam replied 2 years ago.
Hi I am heading to sleep now as an early start tomorrow, but I will answer any responses from you tomorrow morning (as I see you have gone offline) and I hope that is acceptable Thanks Sam