Land, building and construction
Tertiary legislation about VAT on land, buildings and construction (originally published in VAT Notices 708 and 742A) and the DIY Housebuilder Scheme.
The following certificates for zero-rated and reduced-rated building work have force of law under Note 12 group 5 Schedule 8 of the VAT Act 1994. They are published within (VAT Notice 708).
The following text has force of law under Schedule 10 of the VAT Act 1994 and was originally published within VAT Notice 742A
1. Excluding a new building from the effect of an option to tax - the earliest time that you can exclude a building
The time at which the construction of a new building is taken to begin for the purposes of excluding it from the effect of an option to tax (for the purposes of paragraph 27(7) of Schedule 10 to the VAT Act 1994).
Construction of a building begins when it progresses above the level of the building’s foundations.
Usually, a building will have progressed above the level of the foundations at the point at which the first brick is laid.
2. How to notify HMRC when excluding a new building from the effect of an option to tax
Notification of the exclusion of a new building from the effect of an option to tax (for the purpose of paragraph 27 of Schedule 10 to the VAT Act 1994) must be made on form VAT1614F and must contain the information requested on that form
3. Supplies not affected by an option to tax — forms the certificates must take
3.1 Buildings for conversion into dwellings
Certification of intention to use a building (or part of a building) as a dwelling or dwellings or solely for a relevant residential purpose (for the purpose of paragraph 6 of Schedule 10 to the VAT Act 1994) must be made on form VAT1614D and must contain the information requested on that form.
3.1.1 When the certificate should be provided
Time by which a certificate of intended use as a dwelling (or dwellings) or solely for a relevant residential purpose must be given to the seller making the supply (for the purpose of paragraph 6(2) of Schedule 10 to the Value Added Tax Act 1994).
The certificate must be given before the price for the grant to the recipient by the seller is legally fixed, for example by exchange of contracts, letters or missives, or the signing of heads of agreement.
3.2 Land sold to a relevant housing association
Certification by a relevant housing association that land is to be used (after any necessary demolition work) for the construction of a building or buildings intended for use as a dwelling or number of dwellings or solely for a relevant residential purpose (for the purpose of paragraph 10 of Schedule 10 to the VAT Act 1994) must be made on form VAT1614G and must contain the information requested on that form.
3.2.1 When the certificate should be provided
Time by which a certificate of intended use of the land for constructing a dwelling, a number of dwellings, or solely for a relevant residential purpose must be given to the person making the supply (for the purpose of paragraph 10(2) of Schedule 10 to the Value Added Tax Act 1994).
The certificate must be given before the price for the grant to the recipient by the seller is legally fixed, for example exchange of contracts, by missives or letters, or the signing of heads of agreement.
4. Permission to opt to tax
4.1 Automatic permission - conditions
Condition 3 was amended from 1 May 2009.
| Number | Condition |
|---|---|
| 1. | It is a mixed-use development and the only exempt supplies have been in relation to the dwellings. |
| 2. | You do not wish to recover any input tax in relation to the land or building incurred before your option to tax has effect, and the consideration for your exempt supplies has, up to the date when your option to tax is to take effect, been solely by way of rents or service charges and excludes any premiums or payments in respect of occupation after the date on which the option takes effect. Regular rental and service charge payments can be ignored for the purposes of this condition. Payments are considered regular where the intervals between them are no more than a year and where each represents a commercial or genuine arms-length value; and the only input tax relating to the land or building that you expect to recover after the option to tax takes effect will be on overheads, such as regular rental payments, service charges, repairs and maintenance costs. If you expect to claim input tax in relation to refurbishment or redevelopment of the building you will not meet this condition. |
| Notes: When deciding whether you meet this condition you should disregard: VAT refundable to local authorities and other bodies under section 33(2)(b) of the Value Added Tax Act 1994 any input tax you can otherwise recover by virtue of the partial exemption de minimis rules (Regulation 106, VAT Regulations 1995); and any input tax you are entitled to recover on general business overheads not specifically related to the land or building, such as audit fees. |
|
| 3. | You may opt to tax if you satisfy the first (outputs) requirement and (if applicable) the second (inputs) requirement. Definitions For the purposes of this condition: ‘property’ includes land, buildings and civil engineering works. the question of whether a person is ‘connected’ with another person is to be decided as it would be for the purposes of Part 1 of Schedule 10 to the Value Added Tax Act 1994 ‘permissible exempt supplies’ means the following exempt supplies arising from a grant in relation to the land: a. Supplies for which the consideration solely represents legal or valuation costs reimbursed under the agreement for the grant, or b. Supplies where: i. the consideration is provided by way of regular rents or service charges, and ii. the consideration relates to a period of occupation of the property and that period ends no later than 12 months from the date on which the option first takes effect; and iii. no opted supply, other than an opted supply relating solely to the same period of occupation as an exempt supply under point (ii) above, will be reduced in value as a result of the consideration payable for these exempt supplies. First (outputs) requirement You do not intend or expect that any supply which will be taxable as a result of you making your option to tax will either: 1. be made to a person connected with you, or 2. arise from an agreement under which you or another person has made or will make an exempt supply in respect of a right to occupy the property, where the right begins or continues after the date on which the option takes effect. Application of the first (outputs) requirement You may disregard paragraph 1 of the requirement if the person connected with you is expected to be entitled to credit or refund of at least 80% of the VAT chargeable on the supply. For the purposes of paragraph 2 of the requirement you may ignore permissible exempt supplies. Second (inputs) requirement 1. This requirement applies if you have been or expect to be entitled to credit for any part of the input tax incurred on your capital expenditure on the property as being wholly or partly attributable to supplies that are taxable supplies by virtue of your option to tax. 2. Where this requirement applies you must not intend or expect to use any part of the capital expenditure for either of the following purposes: a) making exempt supplies which do not confer a right to credit for input tax pursuant to section 26(2)(c) of the Value Added Tax Act 1994, or b) for private or non-business purposes, other than purposes giving rise to a right to a refund of VAT on the supplies under sections 33, 33A or 41(3) of the Value Added Tax Act 1994. Application of the second (inputs) requirement For the purposes of the requirement, your capital expenditure is your expenditure on goods or services used in connection with the acquisition of, building works on, construction works on or the fitting out of, the property. Capital expenditure does not include expenditure on routine repairs and maintenance. For the purposes of the requirement, ‘entitled to credit’ includes a deduction or credit arising as a result of the application of Regulation 109 or Part XV of the VAT Regulations 1995 (SI 1995/2518). You may disregard paragraph 2a of the requirement if any of paragraphs a), b) or c) below apply: a) all the exempt supplies concerned are supplies which fulfil any of the following descriptions: i. supplies within Paragraphs 5 to 11 of Schedule 10 to the Value Added Tax Act 1994 and made to a person who is not connected to you ii. permissible exempt supplies iii. supplies within Group 5 of Schedule 9 to the Value Added Tax Act 1994 which are incidental to one or more of your business activities b) you make exempt supplies, but intend or expect the input tax incurred on your capital expenditure on the property that is attributed to those exempt supplies, including any subsequent adjustments to initial input tax deduction, will not exceed £5,000 c. you expect to be entitled to full credit for all the input tax incurred on your capital expenditure on the property as a result of the application of section 33(2) of the Value Added Tax Act 1994. |
| 4. | The exempt supplies have been incidental to the main use of the land or building. For example, where you have occupied a building for taxable purposes the following would be seen as incidental to the main use and the condition would be met: allowing an advertising hoarding to be displayed granting space for the erection of a radio mast receiving income from an electricity sub-station. The letting of space to an occupying tenant, however minor, is not incidental. |
4.2 how to apply for permission
An application for prior permission to opt to tax (for the purpose of paragraphs 28 and 29 of Schedule 10 to the Value Added Tax Act 1994) must be made on form VAT 1614H: application for permission to opt and must contain the information requested on that form.
5. Option to tax and VAT registration — how the option to tax affects group registrations
5.1 Stop being a relevant associate after 20 years
Conditions for a body corporate to cease to be treated as a relevant associate of an opter (for the purpose of paragraph 3(5)(a) of Schedule 10 to the Value Added Tax Act 1994 (‘the VAT Act 1994’)).
A body corporate ceases to be a relevant associate of an opter at the time when it meets all of the following conditions:
| Number | Condition |
|---|---|
| 1. | The grouping condition The body corporate has ceased to be treated as a member of the VAT group (see section 43 of the VAT Act 1994) by virtue of which it became a relevant associate of the opter. |
| 2. | The 20 year condition The body corporate has: held any relevant interest in the building or land acquired whilst a member of that VAT group for a period of at least 20 years, and been treated as a relevant associate of the opter for a period of at least 20 years. |
| 3. | The capital item condition Any land or building that is subject to the option is not, in relation to the body corporate, subject to input tax adjustment as a capital item under the Capital Goods Scheme. |
| 4. | The valuation condition Neither the body corporate, nor any person connected with it, has, within a period of 10 years ending on the date that the body corporate ceases to be a relevant associate, made a supply of a relevant interest in the building or land that is subject to the option that: was for a consideration that was less than the open market value of that supply, or arose from a relevant grant. |
| 5. | The pre-payment condition No supply of goods or services has been made for a consideration to the body corporate (or to a person connected with it) which will be wholly or partly attributable to a supply or other use of the land or buildings made by that body (or by a person connected with it) more than 12 months later. |
Explanatory Note 1
‘Relevant interest in the building or land’ means an interest in, right over or licence to occupy the building or land (or any part of it).
Explanatory Note 2
‘Relevant grant’ means a grant that the grantor intends or expects will give rise to a supply for a consideration significantly greater than any consideration for any earlier supply arising from the grant (except as a result of a rent review determined according to normal commercial practice).
Explanatory Note 3
For the purposes of conditions 4 and 5 above, any question whether a person is ‘connected’ with another person is to be decided as it would be for the purposes of Part 1 of Schedule 10 to the Act.
5.2 How to notify HMRC
Notification of cessation to be a relevant associate (for the purpose of paragraph 4 of Schedule 10 to the Value Added Tax Act 1994) must be made on form VAT1614B and must contain the information requested on that form.
5.3 The form your application should take
Application for permission to cease to be a relevant associate (for the purpose of paragraph 4 of Schedule 10 to the Value Added Tax Act 1994) must be made on form VAT1614B and must contain the information requested on that form.
6. Revoking an option to tax
6.1 Revoking an option to tax within the 6 month ‘cooling off’ period
6.1.1 The conditions for revoking
The conditions are:
a) less than 6 months have passed since the day on which the option had effect
b) no tax has become chargeable on a supply of the land as a result of the option
c) no transfer of a going concern has occurred
d) you have notified the revocation to HMRC on form VAT1614C
Additional conditions are set out in section F. To revoke your option to tax you must satisfy conditions a to d, plus one of the 3 conditions in section F, or obtain our permission. Where HMRC grants permission we may impose conditions.
Section F
Additional conditions for revoking an option to tax less than 6 months after the day on which it had effect (provision made under paragraph 23 (4) of Schedule 10 to the Value Added Tax Act 1994).
A revocation of an option to tax under paragraph 23 of Schedule 10 to the Value Added Tax Act 1994 is effective only if one of conditions (1) to (3) below is met in relation to the option, or if the taxpayer gets the prior permission of the Commissioners on an application made to them before the end of the 6 month period mentioned in paragraph 23(1)(a). Where the taxpayer seeks the prior permission of the Commissioners, they may specify conditions subject to which their permission is given and, if any of those conditions are broken, the Commissioners may treat the revocation as if it had not been made.
The conditions are that:
- neither the person who exercised the option to tax (‘the opter’) nor any relevant associate of the opter has recovered extra property input tax;
- by virtue of the revocation, the opter and all relevant associates of the opter would be liable to account to the Commissioners under regulation 107 or 108 of the Value Added Tax Regulations 1995 (‘the VAT Regulations 1995’) for all of the extra property input tax they have recovered, or
- extra property input tax has been recovered entirely on one capital item and amounts to less than 20% of the total input tax incurred on that item.
Definition
‘Extra property input tax’ means input tax attributable to supplies which, if made at a time when the option has effect, would be taxable supplies by virtue of the option.
‘Capital item’ means a capital item to which part 15 of the VAT Regulations 1995 applies by virtue of regulation 113 of those Regulations.
6.1.2 How to notify HMRC
Notification of revocation of an option to tax within the 6 month ‘cooling off’ period (for the purpose of paragraph 23 of Schedule 10 to the VAT Act 1994) must be made on form VAT1614C and must contain the information requested on that form.
6.1.3 How to apply for permission
Application for permission to revoke an option to tax within the 6 month ‘cooling off’ period (for the purpose of paragraph 23 of Schedule 10 to the VAT Act 1994) must be made on form VAT1614C and must contain the information requested on that form.
6.2 Revoking an option where more than 20 years have elapsed since it first had effect
6.2.1 The conditions
Conditions for revoking an option to tax when more than 20 years have elapsed since the option first had effect (for the purposes of paragraph 25(1)(a) of Schedule 10 to the Value Added Tax Act 1994 (‘the VAT Act 1994’)).
A taxpayer may revoke an option to tax made by the taxpayer if either condition 1 or all of conditions 2 to 5 are met:
| Number | Condition |
|---|---|
| 1. | The relevant interest condition Neither the taxpayer nor any relevant associate connected with the taxpayer has a relevant interest in the building or land at the time when the option is revoked, and if the taxpayer or a relevant associate of the taxpayer has disposed of such an interest, no supply for the purpose of the charge to VAT in respect of the disposal - (i) is yet to take place, or (ii) would be yet to take place if one or more conditions (such as the happening of an event or the doing of an act) were to be met. |
| 2. | The 20 year condition The taxpayer or a relevant associate connected with the taxpayer held a relevant interest in the building or land: after the time from which the option had effect, and more than 20 years before the option is revoked. |
| 3. | The capital item condition Any land or building that is subject to the option at the time when it is revoked does not fall, in relation to the taxpayer or a relevant associate connected with the taxpayer, for input tax adjustment as a capital item under part 15 of the Value Added Tax Regulations 1995 (adjustments to the deduction of input tax on capital items). |
| 4. | The valuation condition Neither the taxpayer nor any relevant associate connected to the taxpayer has made a supply of a relevant interest in the building or land subject to the option in the 10 years immediately before revocation of the option that: was for a consideration that was less than the open market value of that supply, or arose from a relevant grant. |
| 5. | The pre-payment condition No part of a supply of goods or services made for consideration to the taxpayer or a relevant associate connected with the taxpayer before the option is revoked will be attributable to a supply or other use of the land or buildings by the taxpayer more than 12 months after the option is revoked. |
Explanatory Note 1
‘Taxpayer’ means
(a) a person who exercised the option to tax or is treated as making that option by virtue of a real estate election pursuant to paragraph 21 of Schedule 10 to the Act, and
(b) in relation to an option to tax treated as exercised by virtue of a real estate election made pursuant to paragraph 21 of Schedule 10 to the VAT Act 1994 by a body corporate treated as a member of a group under sections 43A to 43D of the Act other than the person described in (a), the body corporate whose relevant interest gave rise to the option to tax.
Explanatory Note 2
‘Relevant interest in the building or land’ means an interest in, right over or licence to occupy the building or land (or any part of it).
Explanatory Note 3
‘Relevant grant’ means a grant that the taxpayer intends or expects will give rise to a supply made after the option is revoked for a consideration significantly greater than any consideration for any supply arising from the grant before the revocation (except as a result of a rent review determined according to normal commercial practice).
Explanatory Note 4
In relation to condition 2 it does not matter whether, at the time the option is revoked, the taxpayer continues to hold the relevant interest in the building or land that meets the condition.
Explanatory Note 5
For the purpose of condition 3:
(1) land or buildings that fall for input tax adjustment as a capital item under Part 15 of the VAT Regulations shall not be regarded as so doing if the relevant amount does not exceed £10,000;
(2) the relevant amount is the total of the amounts that the taxpayer or a relevant associate connected with the taxpayer would be required to pay to the Commissioners pursuant to regulation 115 (2) of the VAT Regulations in respect of intervals ending after the revocation of the option if:
(a) that person were a taxable person during such intervals; and
(b) the land or building concerned were used, after the revocation of the option, only for making supplies that are not taxable supplies.
Explanatory Note 6
For the purposes of conditions 1 to 5 any question whether a person is ‘connected’ with another person is to be decided as it would be for the purposes of Part 1 of Schedule 10 to the Act.
Explanatory Note 7
‘Relevant Associate’ means - A body corporate as defined in paragraph 3 of Schedule 10 to the Act.
Further notes
The term ‘relevant associate’ is explained in paragraph 6.3 of VAT Notice 742A.
The second paragraph of condition 1 prevents revocation where the opter or a relevant associate has disposed of the property on terms which may require further payment to be made in the future, such payment is commonly referred to as an ‘overage’ and can be contingent on such things as the granting of planning permission.
Guidance on ‘connected’ persons is in paragraph 13.7 of VAT Notice 742A.
6.2.2 How to notify HMRC
Notification of revocation of an option to tax after 20 years (for the purpose of paragraph 25 of Schedule 10 to the VAT Act 1994) must be made on form VAT1614J and must contain the information requested on that form.
6.2.3 How to apply for permission
Application for permission to revoke an option to tax after 20 years (for the purpose of paragraph 25 of Schedule 10 to the VAT Act 1994) must be made on form VAT1614J and must contain the information requested on that form.
7. Anti-avoidance measures
7.1 What occupation means — How to calculate the proportion of the building occupied by a person for the purposes of the 10% occupation rule
Calculating the proportion of a ‘relevant building’ occupied by a development financier or person connected to a development financier (for the purposes of paragraph 15A(1)(b)(ii) of Schedule 10 to the Value Added Tax Act 1994).
The proportion of a ‘relevant building’ occupied by any person or persons for the purposes of paragraph 15A(1)(b)(ii) of Schedule 10 to the Value Added Tax Act 1994 is to be calculated using the recommended practices set out in the current version of the ‘Code of Measuring Practice’ published by the Royal Institution of Chartered Surveyors (the ‘RICS Code’), but subject to the following:
- Parts of the building that must be excluded include any part: - which is not available for exclusive occupation - intended primarily for use for vehicle parking - which is land forming part of the curtilage of the building
- Where (in relation to any part of the ‘relevant building’) the RICS Code either: - does not specify a ‘core definition’ - specifies the use of more than one ‘core definition’
the ‘core definition’ to be used is that applied or expected to be applied by the grantor for the purposes of calculating rent due from letting that part of the building or, if there is no such definition at the time of the grant, NIA (Net Internal Area).
Explanatory Note 1
Current version of the ‘Code of Measuring Practice’ means the latest published version at the time the grant is made (ie, the grant that is subject to the anti-avoidance test).
7.2 When occupation is ‘wholly’ or ‘substantially wholly’ for eligible purposes — Wholly or substantially wholly
Meaning of ‘wholly’ and ‘substantially wholly’ for eligible purposes (for the purpose of paragraph 15(5) of Schedule 10 to the Value Added Tax Act 1994):
| Expression | Meaning |
|---|---|
| Occupation ‘wholly’ for eligible purposes. | Land occupied 100% for eligible purposes. |
| Occupation ‘substantially wholly’ for eligible purposes. | Land occupied at least 80% for eligible purposes. |
8. Real Estate Election (REE)
8.1 What happens to options to tax you made before making the REE — conversion of single option (for example, a ‘global’ option) into separate options
Conversion of an option to tax land exercised before a real estate election into separate options to tax land in which a relevant interest is held at the time when the real estate election is made (for the purpose of paragraph 22(6) of Schedule 10 to the Value Added Tax Act 1994).
A person making a real estate election may treat an option to tax made before the real estate election is made as though there were separate options to tax of individual parcels of that land. Each parcel of land that is to be treated as being separately opted must: 1. be identified by at least one of the following - its postal address, land registry title number, map or plan or other description, and 2. meet the conditions relating to the scope of an option contained in paragraph 18 of Schedule 10 to the VAT Act 1994.
8.2 How to notify HMRC about a REE
Notification of a real estate election (for the purpose of paragraphs 21 and 22 of Schedule 10 to the Value Added Tax Act 1994) must be made on form VAT1614E and must contain the information requested on that form.
Information to be provided with a notification of a real estate election by a person holding one or more relevant interests in land or buildings (for the purpose of paragraph 21(7) of Schedule 10 to the Value Added Tax Act 1994 (‘the VAT Act 1994’)). The notification of a real estate election must contain the required information in relation to any land or buildings (other than buildings designed or adapted for use as a dwelling or a number of dwellings) in which the person making a real estate election holds a relevant interest at the time the REE is made.
The required information must be provided by way of a list specifying the following in respect of each property (other than dwellings or buildings designed or adapted for use as a dwelling) in which the person holds a relevant interest:
| Number | Condition |
|---|---|
| 1. | a description of the land or buildings, identified by reference to postal address, land registry title number, map, plan or other description |
| 2. | in the case of land or buildings in respect of which no option to tax made by the maker of a real estate election has effect, the date of acquisition of a relevant interest in that land or buildings |
| 3. | in the case of land or buildings in respect of which an option to tax made by the maker of a real estate election has effect, the date when the relevant interest in the land or building was first acquired or, if later, the date when the option first had effect |
| 4. | where an option has effect in relation to 2 or more separately listed parcels of land or buildings, they must be identified as being subject to the same option. |
Explanatory Note 1
‘Relevant interest’ has the same meaning as in paragraph 21(12) of Schedule 10 to the VAT Act 1994.
Explanatory Note 2
If the person making a real estate election has more than one relevant interest in a parcel of land or a building that were acquired at different times, only the date of acquisition of the most recently acquired relevant interest is to be provided.
Explanatory Note 3
If the person making a real estate election is required to provide the date when an option first had effect in relation to a parcel of land or a buildings and that date is unknown, that person should record that fact and enter an approximate date, using that person’s best judgement, and provide a written explanation of why that date is considered reasonable.
8.3 Information you must provide after a real estate election has been made
Information to be provided by the maker of a real estate election when required to do so by the Commissioners (under paragraph 21(8) of Schedule 10 to the Value Added Tax Act 1994 (‘the VAT Act 1994’)).
When required to do so, the maker of a real estate election must provide to the Commissioners the following information in relation to any land or buildings (other than buildings designed or adapted for use as a dwelling) in which that person or a relevant group member:
holds a relevant interest at the time of providing the required information, or has ceased to hold a relevant interest since making a real estate election or, if later, since the last occasion on which the maker of the real estate election provided such information to the Commissioners.
The information set out in part A of this section is to be provided in respect of every such property; the information set out in part B is to be provided in respect of every such property in which a relevant interest has been acquired or disposed of by the maker of the real estate election or a relevant group member since the date of the last such list, if any.
Part A
In respect of any land or building in which the maker of a real estate election or a relevant group member holds a relevant interest or has ceased to hold such an interest as described in the previous pragaraph, the following information must be provided by way of a list specifying:
| Number | Condition |
|---|---|
| 1. | the description of the land or buildings identified by reference to its postal address, land registry title number, map, plan or other description |
| 2. | in the case of land or buildings in respect of which no option to tax made by the maker of a real estate election or relevant group member has effect, the date of acquisition of the relevant interest in the land or buildings |
| 3. | in the case of land or buildings in respect of which an option to tax made by the maker of a real estate election or a relevant group member has effect, the date when the relevant interest in the land or building was acquired or, if later, the date when the option first had effect |
| 4. | where an option has effect in relation to 2 or more separately listed parcels of land or buildings, they must be identified as being subject to the same option |
Part B
The following information must be provided in respect of every property in which a relevant interest has been acquired or disposed of by the maker or the real estate election or a relevant group member since the date of the last such list, if any, by way of a list specifying:
| Number | Condition |
|---|---|
| 1. | As appropriate, the date of the maker of the real estate election or a relevant group member: acquiring a relevant interest in land or buildings in which that person has no other relevant interest ceasing to hold a relevant interest in land or buildings without retaining another relevant interest in that property opting to tax land or buildings otherwise than by virtue of a real estate election converting a building or buildings into a dwelling or dwellings excluding a new building from the effect of an option, and revoking an option to tax in relation to land or buildings. identifying the land or building to which each occurrence relates. |
| 2. | The VAT-exclusive value of the supply of a relevant interest acquired or disposed of by the maker of a real estate election or relevant group member. |
| 3. | The VAT (if any) charged on the supply of a relevant interest by the maker of a real estate election or, where the supply occurred before its admission to the group, the relevant group member. |
Explanatory Note 1
‘Relevant interest’ and ‘relevant group member’ have the same meanings as they do in paragraph 21(12) of Schedule 10 to the VAT Act 1994.
Explanatory Note 2
Where the maker of a real estate election or relevant group member has more than one relevant interest in the same land or building that were acquired at different times, only the date of acquisition of the most recently acquired relevant interest is to be provided.
Explanatory Note 3
In the case of land or a building in which an interest has been held before the date of a real estate election, the date of the occurrence of the making of an option to tax by the person making a real estate election or a relevant group member is the date when that option first has effect.
Explanatory Note 4
The date of the occurrence of the revocation of an option is the date from which the revocation has effect.
Explanatory Note 5
The requirement to provide the information set out in Parts A and B does not apply to the revocation of an option to tax by virtue of paragraph 23 (‘the cooling off’ period) or paragraph 24 (lapse of 6 years since having a relevant interest) of Schedule 10 to the VAT Act 1994.
Notice made under regulation 201 of the Value Added Tax Regulations 1995. The terms used in this notice are defined in Note 7, Group 5, Schedule 8 to the Value Added Tax Act 1994.
1. Method of claiming
The following text has the force of law under regulation 201(1)(a) of the Value Added Tax Regulations 1995 and applies to claims made on or after 5 December 2023.
A claim under regulation 201(1)(a) may be made either electronically or by post.
If the claim is made electronically, it must be made on the form specified for this purpose accessible via HMRC online services.
If the claim is made by post, it must be made on HMRC form VAT431NB, where the claim relates to works described in section 35(1A)(a) or (b) of, or paragraph 18A(3)(a) or (b) of Schedule 9ZA to the Value Added Tax Act 1994 (a new build); or form VAT431C, where the claim relates to works described in section 35(1A)(c) of, or paragraph 18A(3)(c) of Schedule 9ZA to the Value Added Tax Act 1994 (a conversion).
The claim should be sent to:
National DIY Team
S1751
NEWCASTLE
NE98 1ZZ
2. Claims relating to a conversion of a residential derelict building
The following text has the force of law by virtue of regulation 201(1)(b)(vi) of the Value Added Tax Regulations 1995 and applies to claims made on or after 5 December 2023.
When making a claim relating to a conversion of a residential derelict building, a letter from an Empty Property Officer will constitute sufficient evidence to demonstrate that the building was not lived in for the 10 years immediately before work started.
If you do not have a letter from an Empty Property Officer, then you must provide alternative evidence that HMRC can place reliance on, which may include:
- electoral register (sometimes called the ‘electoral roll’) records
- Council Tax records
- utility company records
- confirmation of a property being empty by a reliable witness, for example solicitor or estate agent