HMRC have issued revised guidance and will issue amended claim forms by 15 August for use by homeowners claiming back the VAT element of the costs of building their own home. The changes are intended to ensure that a homeowner building a home can benefit from the rules which allow the qualifying construction costs of new homes and certain conversion works to be zero-rated.
From 15 August 2009 the old claim form will be replaced by two new forms. The first form (VAT 431NB) is designed for new builds and the second form (VAT431C) is designed for qualifying conversions i.e. the conversion of a non-residential property to residential.
In addition, VAT Notice 719 ‘Refunds for do-it-yourself builders and converters’ is being withdrawn and replaced by two new sets of guidance to mirror the two new forms.
It is hoped that these changes will result in a more streamlined application process which will speed up VAT repayments to homeowners and reduce the number of queries by HMRC.