Conditions for the D-I-Y Housebuilders Scheme

The presence of a special refund scheme aims to put D-I-Y builders into a similar positions to that of a developer selling a zero-rated property by refunding any VAT incurred on the costs of construction/conversion.


This refund scheme was basis of the case heard by the First-Tier Tribunal in which VAT claimed under the scheme by the Appellant was refused by HMRC on the basis that the buildings works undertaken were “unlawful” and that statutory planning consent had not been granted in respect of the dwelling.


One of the conditions defined in the legislation regarding this scheme states that for a VAT refund claim to be considered valid, it must relate to work “carried out lawfully”. The Planning Permission necessary should be obtained before works commence as to facilitate a valid claim the works undertaken must be lawful at the time they are carried out and therefore retrospective application for planning permission would not be accepted.


The First-Tier Tribunal dismissed the Appellants case as all the conditions required for a D-I-Y housebuilders claim to be valid were not satisfied.


If you are involved in the construction or conversion of a property and think you may be eligible to use this scheme, please discuss the conditions that need to be satisfied with one of our experienced consultants via our free helpline.

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