Sign in to follow this  
Followers 0
Spot

Is There Any Way To Reduce The Vat Payable On An Extension

33 posts in this topic

I'm just gob smacked by the potential costs involved of having an extension done. £1,000 - £1,200 per square seems to be the going rate and then there's the 20% VAT on top.

In order to have useful space that is in proportion with the rest of the house our proposed 2 storey extension will add on about 100 square meters.

So i'm looking at £20,000 or more of VAT (plus then all the VAT i'll have to pay on all the additional bits and pieces) and this is a deal breaker.

If i've got to pay that much tax I just won't go ahead with the project, especially as i'd have to stick that cost on the mortgage so would be paying interest on it.

In principle I refuse to pay more for the extension than the fekking house cost in the first place.

Does anyone know of any clever legal ways to get around it?

I've had a look on the HMRC website and there's not a lot there that could help.

Share this post


Link to post
Share on other sites

I'm just gob smacked by the potential costs involved of having an extension done. £1,000 - £1,200 per square seems to be the going rate and then there's the 20% VAT on top.

In order to have useful space that is in proportion with the rest of the house our proposed 2 storey extension will add on about 100 square meters.

So i'm looking at £20,000 or more of VAT (plus then all the VAT i'll have to pay on all the additional bits and pieces) and this is a deal breaker.

If i've got to pay that much tax I just won't go ahead with the project, especially as i'd have to stick that cost on the mortgage so would be paying interest on it.

In principle I refuse to pay more for the extension than the fekking house cost in the first place.

Does anyone know of any clever legal ways to get around it?

I've had a look on the HMRC website and there's not a lot there that could help.

There's not a lot of incentive for everyone else to help you avoid your tax. :lol:

Share this post


Link to post
Share on other sites

From memory there's not much you can do.

If the property is derelict, or has been uninhabited for some time them VAT is zero rated; the same for a new build.

Extensions though they have you over a barrel.

Share this post


Link to post
Share on other sites

Buy all your stuff from ebay.

Build a new house immediately adjacent to yours, then just knock through the walls.

Share this post


Link to post
Share on other sites

Does anyone know of any clever legal ways to get around it?

1. Use labour which is (legally) non-VAT registered. That will save halve your VAT bill.

2. Used "seconds" insulation. I use http://www.secondsandco.co.uk. Its about half price (you will need a lot of it for latest building regs). Some sizes/shapes are nonstandard or market but perfectly usable.

3. Do lots of work yourself and buy the materials yourself. I use less2build.com

4. Use cash-in-hand for some work that you don't need a guarantee for (e.g. labouring at £8/hour).

5. Don't use an architect on % commission.

Share this post


Link to post
Share on other sites

DIY

or to steal a universal truth from off topic, move house.

Considered this but anywhere better in the same area is unaffordable and places we've looked at further out are overpriced tat that have not been an improvement on where we are. Plus we love where we are, just need a bit of extra room....

Share this post


Link to post
Share on other sites

There's not a lot of incentive for everyone else to help you avoid your tax. :lol:

I hear ya! :D

But there are some very kind and helpful people out there.....

Share this post


Link to post
Share on other sites

Considered this but anywhere better in the same area is unaffordable and places we've looked at further out are overpriced tat that have not been an improvement on where we are. Plus we love where we are, just need a bit of extra room....

100 sq m is not "a bit" of extra room - by UK standards thats a 3 bed house.

Share this post


Link to post
Share on other sites

1. Use labour which is (legally) non-VAT registered. That will save halve your VAT bill.

2. Used "seconds" insulation. I use http://www.secondsandco.co.uk. Its about half price (you will need a lot of it for latest building regs). Some sizes/shapes are nonstandard or market but perfectly usable.

3. Do lots of work yourself and buy the materials yourself. I use less2build.com

4. Use cash-in-hand for some work that you don't need a guarantee for (e.g. labouring at £8/hour).

5. Don't use an architect on % commission.

Cheers! That's the stuff!

Point 3 is not an option for me though, don't have the time to do the work myself and as the house will be uninhabitable (existing extension will need removing first meaning we lose kitchen, laundry room, etc...) any money saved would be lost by having to rent for longer.

Share this post


Link to post
Share on other sites

I'm just gob smacked by the potential costs involved of having an extension done. £1,000 - £1,200 per square seems to be the going rate and then there's the 20% VAT on top.

In order to have useful space that is in proportion with the rest of the house our proposed 2 storey extension will add on about 100 square meters.

So i'm looking at £20,000 or more of VAT (plus then all the VAT i'll have to pay on all the additional bits and pieces) and this is a deal breaker.

If i've got to pay that much tax I just won't go ahead with the project, especially as i'd have to stick that cost on the mortgage so would be paying interest on it.

In principle I refuse to pay more for the extension than the fekking house cost in the first place.

Does anyone know of any clever legal ways to get around it?

I've had a look on the HMRC website and there's not a lot there that could help.

There is a way.

But the advice will cost you £20 grand - plus VAT :)

Share this post


Link to post
Share on other sites

100 sq m is not "a bit" of extra room - by UK standards thats a 3 bed house.

It's 2 bedrooms, a kitchen, a dining room and utility room to me.

Share this post


Link to post
Share on other sites

Knock a hole in the back of the house, take half the roof off and call a TV production company with a sob story.

Share this post


Link to post
Share on other sites

Claim listed status. Worth a try.

It's unusual and old (1894 and built with cavity walls) so it may qualify but wouldn't being listed then shaft me for the changes?

Share this post


Link to post
Share on other sites

Knock a hole in the back of the house, take half the roof off and call a TV production company with a sob story.

That's the winner! :D

Share this post


Link to post
Share on other sites

Thread on uk.d-i-y about it at the moment.

Link?

Share this post


Link to post
Share on other sites

Does anyone know of any clever legal ways to get around it?

Easy, new builds are VAT free but extensions repairs etc are VAT able.

Simply demolish your existing house and build a new one.

Share this post


Link to post
Share on other sites

Easy, new builds are VAT free but extensions repairs etc are VAT able.

Simply demolish your existing house and build a new one.

I was going to suggest that in semi-jest, but does it actually have any legs? And what does a typical rebuild cost come in at, if you already own the land?

Share this post


Link to post
Share on other sites

I was going to suggest that in semi-jest, but does it actually have any legs? And what does a typical rebuild cost come in at, if you already own the land?

I actually had vaguely considered this as I see to remember ages ago that a 3 bed detached could be built for about £80k.

It must have been ages ago as I did a bit of research the other day and rough figures from assorted websites seemed to indicate about £215K for a 4 bed detached now.

And you'll pay something like £12K or more to get the old one demolished and all the bits taken away.

And council will have to give you planning permission to demolish it in the first place...

Share this post


Link to post
Share on other sites

get an account set up with a builders merchant find some good prices first this prevent any one making money on materials saving you money,get a bricky with labourer both with a good knowledge of ground work get them to bring it up to plate height then chippy to put roof on roofer to felt batten and slate now your in the dry find other relevant trades to take you to the finish line and paint it yourself you'll save your self a sh-t load of money.

Share this post


Link to post
Share on other sites

Create an account or sign in to comment

You need to be a member in order to leave a comment

Create an account

Sign up for a new account in our community. It's easy!


Register a new account

Sign in

Already have an account? Sign in here.


Sign In Now
Sign in to follow this  
Followers 0

  • Recently Browsing   0 members

    No registered users viewing this page.