VAT refunds for constructing a new charity building
Check if you can claim a VAT refund using the DIY housebuilders scheme if you’re constructing a new charity building, for a charitable or relevant residential purpose.
Using the DIY housebuilders scheme
To make a claim using the DIY housebuilders scheme you must be:
- eligible to make a claim
- constructing a building intended for use solely for a relevant charitable purpose
A building (or part of a building) is not used solely for a relevant charitable purpose when it’s:
- used at the same time for other purposes
- used at a different time for other purposes
- never used for a relevant charitable purpose
For example, if it’s used :
- as a fee paying child nursery or school
- by a charity for administering business activities, such as fund raising events where an entrance fee is charged
Your charity must be recognised by HMRC and registered with the appropriate regulator.
If your charity is not currently recognised by HMRC, you can apply for recognition online.
Minor non-qualifying use
You may not be able to make a claim if you do not intend to use the building solely for a relevant charitable purpose. The term ‘solely’, can incorporate an appropriate smaller margin of 5% use that is not for a charitable purpose.
To avoid unnecessary disputes in marginal cases, we accept that the ‘solely’ requirement is satisfied if the qualifying use is 95% or more.
Relevant charitable purpose
A relevant charitable purpose building is used by a charity for non-business purposes.
For VAT purposes, activities that do not make a profit, or activities where any profit is only used to further the aims and objectives of the charity, can still be classed as business activities.
Examples of qualifying buildings, depending on the circumstances, include:
- places of worship
- offices used by charities for administering non-business activity, such as the collection of donations
- school buildings where no fee is charged for providing education
- research buildings where the research is grant funded
- scout and guide huts used purely for scouting and guiding activities
Relevant residential purpose
A relevant residential purpose building is used by a charity for non-business purposes. It is:
- a home or other institution providing residential accommodation for children
- a home or other institution providing residential accommodation with personal care for old age people, disablement, past or present dependence on alcohol or drugs or past or present mental disorder
- a hospice (as long as that hospice provides some residential accommodation, such as beds for patients)
- residential accommodation for students or school pupils
- residential accommodation for members of any of the armed forces
- a monastery, nunnery or similar establishment
- an institution which is the sole or main residence of at least 90 per cent of its residents
This does not include a building used as, a hospital or similar institution, a prison or similar institution, or an hotel, inn or similar establishment.
Examples of residential purpose buildings you cannot claim for under the scheme include:
- relevant residential purpose buildings used for a business purpose, such as by someone who makes a charge to the resident for staying at the home, institution or establishment
- a detached building in the grounds of an existing care home that extends the facilities of the home
- hospital ward blocks
- day care units at hospices
Making a claim
You’ll need to check which goods and services you can or cannot claim for.
Documents needed for your claim
When making a claim you need to send us:
- the claim form (for claims by post), including a schedule of all the invoices you want to claim for
- your claim calculations
- evidence the construction or conversion is completed
- a copy of the planning permission
- plans of the building
- if you are claiming for a building to be used for a relevant charitable purpose, a declaration as to whether you are using (or want approval to use) the ‘minor non-qualifying use’ concession
Do not send original documents as we will not be able to return them to you.
VAT invoices
You must keep a record of all invoices, bills, credit notes and other documents to support the amount of your claim. We’ll contact you to let you know which invoices you need to send us.
You need to record these details in a .
You must have a VAT invoice for all the eligible goods you claim for.
The goods must have been supplied to you and we may ask you to prove you have paid for them. The VAT invoice must show:
- the supplier’s name, address and VAT registration number
- date of issue
- the quantity and description of the goods
- your name and address if the value is more than £250
- the price of each item showing the VAT treatment
Buildings completed before 5 December 2023
You can only make a single claim under the scheme, and you must do this no more than 3 months after the new build is completed.
The 3 months start from the date of the completion certification, or other evidence that you provide to support completion of the property.
If you cannot make your claim within the 3 months allowed by law, you should write to HMRC explaining the reasons for the delay.
You cannot make a second claim if you choose a date earlier than the completion certificate and use other evidence of completion.
If you have already submitted a claim form, you can send additional information or invoices for either a claim which:
- has not yet been paid
- has been paid — you should do this no later than 4 years after the building has been completed
You must include your claim reference number for all additional information.
Buildings completed on or after 5 December 2023
You can only make a single claim under the scheme. You must do this no more than 6 months after the building has been completed.
The 6 months start from the date of the completion certification or other evidence that you provide to support completion of the property.
If you cannot make your claim within the 6 months allowed by law, you should write to HMRC explaining the reasons for the delay.
You cannot make a second claim if you choose a date earlier than the completion certificate and use other evidence of completion.
If you have already submitted a claim form, you can send additional information or invoices for either a claim which:
- has not yet been paid
- has been paid — you should do this no later than 4 years after the building has been completed
You must include your claim reference number for all additional information.
How to make your claim
Use the online service or fill in form VAT431NB to make a claim.
Using an agent
You can authorise an agent to act on your behalf (64-8). Your agent will then be able to complete and submit the DIY housebuilder’s claim form for you. Your agent will also be able to submit invoices and any other information requested by HMRC.
The authorisation will only cover one DIY claim. You will need to enter your National Insurance Number on the 64-8.
It is your responsibility to ensure that the information on the claim form is accurate and complete to the best of your knowledge. You will need to confirm this to your agent before they submit the claim.
VAT refunds made under the DIY housebuilders scheme will be paid into the bank account of the DIY housebuilder.
You should keep a copy of your claim as we may ask you questions about it.
Correcting errors
If you discover a claim that you’ve made contains errors, you should contact us as soon as possible.
If we discover an error in your claim you will be liable to a penalty if:
- the error is deliberate
- reasonable care has not been taken to prevent the error from happening
How long it takes
Claims online
We will write to you within 2 weeks to tell you your claim reference number. We may also ask you any questions we have about your claim.
We aim to process your claim within 3 weeks after we have received all information needed from you. If your claim is successful, we will write to tell you when you can expect to receive your VAT refund from the National Payment Centre.
Claims by post
We will write to you within 4 weeks to tell you your claim reference number. We may also ask you any questions we have about your claim.
We aim to process your claim within 6 weeks after we have received all information needed from you. If your claim is successful, we will write to tell you when you can expect to receive your VAT refund from the National Payment Centre.
Claims rejected or not paid in full
If your claim is rejected or not paid in full, we’ll tell you the reasons why. If you do not agree with our decision, you can either:
- ask for it 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.
For a review you should:
- write to the address given in the decision letter within 30 days of the date of the letter
- give your reasons why you do not agree with the decision
If you accept the offer of a review, then you cannot appeal to a tribunal until the review officer tells you the outcome.
To make an appeal to the tax tribunal, you should send them your appeal within 30 days of the date of the decision letter.
You can get more information about appeals and reviews.
Updates to this page
Last updated 11 April 2024 + show all updates
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A schedule of invoices template and information on using an agent when making a claim has been added.
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'Date of issue' has been added to the list of what an invoice must show. Information to tell you not send original documents as we will not be able to return them to you, has also been added.
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First published.