VRDP11550 - Building alterations [items 8 to 13]: bathrooms, washrooms and lavatories
Zero-rating is permitted under items 10, 11 and 12 (see VRDP11050) for the provision, extension or adaptation of a bathroom, washroom or lavatory. Each of those items sets out its own conditions concerning the place where the work is carried out. The conditions are described in greater detail in VRDP11600.
However, in the first instance, the work must be of a type which qualifies for relief under these items. The following works are considered to come within the zero-rate.
Services
The services of providing, extending or altering a bathroom, washroom or lavatory.
Other essential work
This includes:
- demolition of an existing outside toilet;
- preparation of footings including ground levelling;
- provision of water, gas, electricity and drainage as necessary;
- covered access to newly provided facilities; and
- restoration of immediate decor (where appropriate).
Sensible approach
You should take a sensible approach to these types of building work and allow zero-rating for works which are essential to the completion of a qualifying room such as:
- where for reasons of practicality or because of planning permission, a passageway has to be constructed to allow a disabled person access to a ground floor bathroom. It would be unreasonable to expect a disabled person to be exposed to the elements when moving from the bathroom to another part of the house.
However, the following works do not come within the scope of the relief:
- the straightforward substitution of old sanitary ware for new; and
- works to bedrooms and kitchens
where an extension to provide a bathroom, washroom or lavatory includes a bedroom/dayroom the supply should be apportioned between its standard-rated and zero-rated parts.
Lost space
Whilst the law applies the zero rate to the installation, extension or adaptation of a bathroom, washroom or lavatory, where it is necessary because of the disabled customer’s disability, HMRC interprets this to include works that are necessary to restore lost space within the customer’s private residence.
From 26 August 2019, HMRC’s interpretation of the ‘lost space’ allowance is as follows:
(a) Where a bathroom, washroom or lavatory has been installed, extended or adapted in a disabled person’s private residence, because of their condition, the work may be zero-rated (see paragraph 6.3).
(b) If the works involved have reduced the size of another room within that private residence there will be ‘lost space’.
(c) The works necessary for making good that ‘lost space’ can be regarded as part of the work essential to the provision of the bathroom, washroom or lavatory. The restoration of that ‘lost space’, but only that ‘lost space’, by restoring the room itself to its original size, can also be zero-rated. This can be done through internal works or by extending outwards or upwards.
(d) The zero rate does not extend beyond the reinstatement of the ‘lost space’, so everything else, including converting another room in the residence to replace the lost room, will be standard rated.
(e) If the works go further than the ‘lost space’ amount, that extra new space must be treated as standard rated. An apportionment of the zero and standard rated parts must be made, and further details can be found in VAT Notice 700 The VAT Guide.
(f) The ‘lost space’ amount that can be zero-rated must follow the exact specifications in floor measurements, or room volume, of the area lost.
(g) The application of the zero rate in these circumstances only applies to the reinstatement of ‘lost space’ in terms of building works. It does not extend to fixtures, fittings, units, etc. However, the zero rate does apply to the provision of utilities that were available in the original converted room.
Notice 701/7 has been amended to include this interpretation.