vat on New Builds

[Nosha123]

all opinions welcome folks..

we are about 3 months from completion of our new home and are going to wait until completion before putting in our vat reclaim (all new builds are zero rated so you save all the receipts and send them in along with your application and get a rebate on all materials purchased). but I was worried that with all these cost cutting exercises the new government are doing - they might change the rules before we can get it in!
We could stand to lose a lot of money - and be lumbered with credit card bills and loans we were hoping would be paid off with the reclaim.

I know that the LibDems had it as one of their policies - to increase vat on new builds and then reduce it on renovations - what do you think in your opinion might happen. And when do you think they would bring it in....
Interested in your thoughts

would appreciate your opinion!

[treebear]

I think the rules are thus
you must live in the property and /or be vat registered

[Nosha123]

Hi treebear... thanks for your input...

the rules currently are that if you are a self builder - you pay no vat on materials used to build the house... (you pay it then reclaim it back after the house is complete!)

my question is - do you think this new government will change this? Lib Dems proposed it in their manifesto....

What do you think the Tories will decide?

If they change it - I need to get my application in PDQ!!!

[jake-the-peg]

They seem to be moving pretty quick with announcements of changes and we've had the Queens speech.

If it's not in the budget (22nd June) you'll probably be OK

If they do bring it in there's a pretty good chance it would be tapered in so as not to hit people already in the middle.

You could put in early but then you'd miss out on anything from now on.

Personally I reckon you'll be OK

But then it's not my money

[The Builder]

Did you set this up with HMRC when you started the job Nosh? I think you should have a pack of some sort, with all the reclaim forms etc.
If so, then I doubt very much that any new legislation would affect projects that are already underway.
Good luck with the house.

[Nosha123]

thanks Jake - I really appreciate your input...
I dont think I can get the application ready for 22nd June... anyway! Even if I wanted to put it in early and for-go the rest..

Do you think - if it is introduced it would be 17.5% rated ? or much less than that?
I've written to my local MP who is Tory to ask what their policy is on it...

If someone gave me a sniff or hint that yes it is likely to change then I would rush our application through...

I think if they did bring it in - it would have quite a big impact on the housing market... so am hoping that they wont do it - at least just yet anyway...

Is June the only budget this year planned? Or is there a second one in Autumn???

[Nosha123]

Hello The Builder.. I do have the pack yes - it was sent to me quite some time ago... I might call them and ask for another... in case any forms have changed - and check that they have it noted we will be a future applicant!

At least if they know about me... then I have covered my bases as much as I can!

Thanks for the advice!

[jake-the-peg]

Nosha

Given that you have already paid for things and a tax point was set at that point changing the law to retrospectively apply to purchases made prior to that would be politically very difficult.

I can only think of one piece of retrospective legislation in English law (the War crimes act) and that took the Parliament act to pass it.

I would imagine that a retrospective change would be open to a legal challenge on that basis and I can't imagine a new Government wanting to risk that.

I think you're most likely going to be fine

[Nosha123]

Thanks Jake - really appreciate you taking the time to answer!

Enjoy the Bank Hols!