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


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#1 Spot

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Posted 21 February 2012 - 12:15 PM

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.

#2 hotairmail

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Posted 21 February 2012 - 12:18 PM

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:



#3 Ascii

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Posted 21 February 2012 - 12:18 PM

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.

#4 7 Year Itch

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Posted 21 February 2012 - 12:21 PM

DIY

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

There is no ladder.

JY


No need to sell up, the next phase of the economics cycle is going to be very positive for anyone that owns property.

All I'm sayings is, don't listen to the property bears people, they are wrong.


#5 Lepista

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Posted 21 February 2012 - 12:24 PM

Buy all your stuff from ebay.

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

Nothing sedates rationality like large doses of effortless money. After a heady experience of that kind, normally sensible behaviour drift into behaviour akin to that of Cinderella at the ball. They know that overstaying the festivities...will eventually bring on pumpkins and mice. But they nevertheless hate to miss a single minute of what is a helluva party. Therefore, the giddy participants all plan to leave just seconds before midnight. There's a problem, though: They are dancing in a room in which the clocks have no hands."

My favorite post ever:
By Ruffles the Guinea Pig

#6 VeryMeanReversion

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Posted 21 February 2012 - 12:26 PM

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.
"A pound is just a promise to give you another one."

#7 Spot

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Posted 21 February 2012 - 12:32 PM

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....

#8 Spot

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Posted 21 February 2012 - 12:33 PM

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.....

#9 7 Year Itch

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Posted 21 February 2012 - 12:35 PM

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.

There is no ladder.

JY


No need to sell up, the next phase of the economics cycle is going to be very positive for anyone that owns property.

All I'm sayings is, don't listen to the property bears people, they are wrong.


#10 Spot

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Posted 21 February 2012 - 12:39 PM

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.

#11 Fishman

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Posted 21 February 2012 - 12:41 PM

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 :)

#12 Spot

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Posted 21 February 2012 - 12:41 PM

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.

#13 Tonkers

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Posted 21 February 2012 - 12:56 PM

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

#14 Spot

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Posted 21 February 2012 - 01:29 PM

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?

#15 Spot

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Posted 21 February 2012 - 01:30 PM

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




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