>I had a troubling call from North Wales yesterday. The caller had just completed the restoration of a derelict cottage. It had been empty for seven years. As is his right, and as I have been advocating, he put in a claim to the local Customs and Excise office to reclaim his VAT under the VAT refund scheme.
The general and rather strange rule on VAT on restorations is that all building costs (materials and labour) are liable for VAT at 17.5%. New build properties however, are zero-rated.This gives a perverse incentive to build new houses when restoring existing ones may [...]