Reduced VAT on renovation work

To allow contractors to apply the reduced rate of VAT to their services, you must provide them with evidence that the property has been empty for 2 or more years. Acceptable evidence as agreed by HM Revenue & Customs is a letter from the local authority confirming how long a property has been empty. Hartlepool Borough Council will provide a letter to support VAT reduction for renovation and refurbishment works to an empty property.

Generally speaking, renovation work or alterations to an existing residential property are normally subject to Value Added Tax (VAT) at the standard rate.

To promote the renovation of empty residential properties the government introduced an amendment to VAT law which under certain criteria allows for the reduced rate of 5% to be charged on renovation work and alterations to empty residential properties.

Apart from the fact that the property must be residential, it must also have been empty for 2 years or more.

Other than installing goods that are not building materials, you can receive the reduced rate of VAT on any works of repair, maintenance (such as redecoration), or improvement (such as the construction of an extension or the installation of double glazing) carried out to the fabric of the dwelling.

For more information you can telephone HM Revenue & Customs National Advice Service on 0845 010 9000 or view the HM Revenue & Customs website and type in "Notice 708" in the search bar.