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If you’re building your own home, you may be able to claim VAT on new build and recover thousands of pounds paid on eligible materials. This step-by-step guide explains who qualifies, what you can reclaim, how to complete the VAT431NB form, the updated 6-month deadline, and the typical VAT refund timeline with expert tips to avoid HMRC rejections.
Understanding how VAT applies to new build properties can be confusing, especially with the recent post Brexit VAT updates. Understanding VAT Changes After Brexit
What Does Claiming VAT on a New Build Mean?
Understanding how VAT works on new build properties
When a developer sells you a brand-new home, that sale is zero-rated for VAT. If you build a new dwelling yourself, you don’t benefit from that zero-rated sale—but HMRC lets you reclaim VAT on eligible building materials you personally bought for the build. This is done under the DIY Housebuilders’ Scheme.
Construction services on qualifying new dwellings provided by VAT-registered builders are normally zero-rated, so you shouldn’t be charged VAT on their labour. That’s why the DIY scheme focuses on materials you buy, not builders’ labour. GOV.UK
When you can reclaim VAT under the HMRC DIY Housebuilders’ Scheme
You can claim once the build is complete and you have your building control completion certificate (or accepted proof). For builds completed on or after 5 December 2023, the claim deadline is within 6 months of completion (it was 3 months before that date). Claims can be made online or by post using VAT431NB.
Key difference between new builds and conversions (VAT431NB vs VAT431C)
- New build: claim eligible materials only using VAT431NB. Services should be zero-rated by the contractor.
- Conversions (e.g., barn to dwelling or a property unused for 10+ years): you may claim materials and certain services using VAT431C.
Who Can Claim VAT on a New Build Property?
Eligibility criteria under HMRC VAT guidance (VAT Notice 431NB & GOV.UK)
You can claim if you’re a DIY housebuilder who:
- Has built a new dwelling to be used by you (or your relatives) as a home.
- Holds planning permission and a completion certificate (or accepted evidence).
- Submits the claim within 6 months of completion (for completions on/after 5 Dec 2023).
Homeowners vs developers: who qualifies
The DIY scheme is for private individuals building a home for personal use not for commercial developers. Developers selling or long-leasing a new dwelling rely on zero-rating rules in VAT Notice 708, rather than the DIY scheme.
Situations where you can’t reclaim VAT
- Extensions, annexes or rebuilds that don’t create a new, separate dwelling (e.g., typical extensions and most knock-downs that retain substantial parts may not qualify).
- Works on an already completed dwelling you bought from a developer.
- Business use (e.g., a property intended for sale or let). Always check if the project creates a qualifying new dwelling under Notice 708.
If you are a property investor or small developer, understanding your VAT reclaim options can significantly reduce your costs. Property and Real Estate Accountants
What Can You Claim VAT Back On?
Qualifying building materials and services
You can reclaim VAT on building materials you bought that are incorporated into the new home or its site (e.g., bricks, insulation, boilers, wiring, windows, sanitaryware, certain built-in kitchen furniture).
Services for new builds (e.g., your main contractor’s labour) should be zero-rated, so there’s normally no VAT to reclaim on labour for a qualifying new dwelling.
Items you cannot claim VAT on
Common disallowed items include: freestanding appliances (white goods), carpets, most fitted wardrobes and bathroom cabinets, AV/audio systems, professional fees (architects, surveyors), tools/equipment hire, broadband connections, and many furnishings. HMRC publishes an A–Z list of allowable/disallowable items check it before buying.
Common mistakes when collecting invoices
- Using pro-forma or till receipts instead of valid VAT invoices.
- Invoices not in the claimant’s name.
- Claiming items delivered after completion or not incorporated into the dwelling.
- Including contractor labour for a new build (should have been zero-rated). The VAT431NB schedule requires supplier VAT numbers and invoice details get these right the first time.
Step-by-Step Process to Claim VAT on New Build
Step 1 – Gather your invoices and evidence
Collect:
Step 2 – Complete the HMRC VAT431NB form
You can claim online or by post. For the postal claim, complete the invoice schedules (Tables A & B) on VAT431NB. Post-December 2023, HMRC typically doesn’t require invoices up-front they’ll ask for selected invoices if needed.
Step 3 – Submit your claim within the deadline
- 3 months if your completion date was before 5 Dec 2023
- 6 months if completed on/after 5 Dec 2023
Send online via GOV.UK or post to BT&C VAT, HMRC, BX9 1WR.
Step 4 – HMRC review and refund process explained
HMRC will issue a claim reference and may request further information or selected invoices. For conversions, HMRC states they aim to process online claims within 3 weeks after receiving all information, and postal claims within ~6 weeks; new-build timings are broadly comparable.
Filling out the VAT431NB form can be time consuming and tricky, especially if you are unsure which expenses qualify. VAT Services for Property Developers
Typical refund timeline and what delays approval
Expect the process to take a few to several weeks once HMRC has everything they need. Delays usually arise from: missing planning/ completion evidence, incomplete invoice details, ineligible items, or incorrect VAT charged by suppliers (which HMRC won’t refund suppliers must correct it).
Required Documents for VAT Reclaim
Proof of completion and planning permission
- Building regulations completion certificate (copies accepted).
- Full planning permission, or outline + reserved matters approval.
Invoices and supplier details
- Valid VAT invoices with supplier name and VAT number, item descriptions, dates and amounts.
- Invoice schedules must match the form’s requirements (Tables A & B). form
Evidence of payment and ownership
HMRC may ask for evidence of payment and bank details for the refund; you’ll also declare the home is for you/your relatives to live in.
How Much VAT Can You Expect to Reclaim?
Example calculation
If you spent £75,000 on qualifying materials at 20% VAT, the VAT element is £12,500. That’s the headline figure you could reclaim subject to HMRC disallowing any ineligible items.
How to estimate your VAT refund
Add up the VAT shown on your eligible invoices (or back-calculate VAT where it isn’t shown using the form’s Table B). Be sure to exclude disallowed items. (See HMRC’s A–Z list for checks.)
What happens if your builder already charged 0% VAT
That’s correct for qualifying new build labour and installed building materials supplied by the contractor there’s no VAT to reclaim on those invoices. Your claim will focus on the materials you purchased yourself.
Common Questions About Claiming VAT on New Builds (FAQs)
Generally no qualifying new build labour should be zero-rated by the contractor. The DIY scheme refunds materials you buy.
Once HMRC has all the information, typical aims are 3 weeks online and 6 weeks by post (not guaranteed).
Within 6 months of completion for builds completed on/after 5 Dec 2023 (3 months if before).
Claims are made after completion; HMRC relies on your completion certificate or accepted evidence.
No. professional fees are disallowed for new builds under the DIY scheme.
Write to HMRC explaining the reasons. Late claims may be considered, but there’s no guarantee act quickly.
Not mandatory, but errors cause delays or reductions. A specialist ensures invoices are compliant, items are eligible and deadlines are met.
Tips to Avoid VAT Reclaim Mistakes
Keep all original invoices (send copies to HMRC if asked; don’t post originals).
Confirm the project qualifies as a new dwelling (not an extension).
Ensure contractors zero-rate qualifying new build services don’t pay VAT you can’t reclaim.
Cross-check purchases against HMRC’s allowable/disallowable A–Z list before buying.
When to Get Professional Help
Consider expert support where:
- The build is complex (e.g., multi-unit site, mixed-use or phased works).
- Your invoices mix eligible and ineligible items.
- The expected claim is £10,000+.
Need help with your HMRC VAT431NB claim? IBISS & CO VAT specialists can manage the process end-to-end maximising your refund and keeping you compliant.
Final Checklist Before Submitting Your Claim
Cross-check purchases against HMRC’s allowable/disallowable A–Z list before buying.
Building plans.
Invoice list completed (supplier VAT numbers included).
Bank details for the refund.
Submission within 6 months of completion (if completed on/after 5 Dec 2023).
Useful links:
- HMRC DIY Housebuilders – New Builds (online/postal): guidance and VAT431NB form.
Key takeaways
You can claim VAT on new build under HMRC’s DIY Housebuilders’ Scheme for eligible materials you bought personally.
For completions on/after 5 December 2023, the claim window is 6 months. Submit online or by post using VAT431NB.
Contractor labour on qualifying new builds should be zero-rated, so there’s no VAT to reclaim on labour.
Check HMRC’s A–Z list and keep compliant, invoice-level records to avoid delays.
Once you have claim VAT on new build home, it’s also important to plan for other property-related taxes that might affect you in the future. Capital Gains Tax on Property Sales in the UK
