- The guidelines explain HMRC’s policy on VAT treatment of remedial works including cladding replacement
- The guidelines aim to help understand tax considerations for accurate submissions
- Construction and remedial works are usually taxed at the standard VAT rate
- Zero VAT rate applies only during the construction of qualifying buildings
- Reduced VAT rate applies during qualifying conversions or certain renovations of empty residential premises
- Standard VAT rate applies to improvements, repairs, and maintenance after construction or conversion
- Snagging, if part of the original construction or conversion, may qualify for VAT relief
- HMRC defines snagging as remedial works to correct faults under the original construction contract
- For HMRC to consider works as snagging, they must be part of the original construction service supply
- Conditions for snagging include fault in original construction, obligation under original contract, work done by someone with person constructing status, and no new supply or charge for remediation
- Future works on a completed property are normally considered repairs or maintenance, charged at the standard VAT rate
Source: gov.uk
Note that this post was (partially) written with the help of AI. It is always useful to review the original source material, and where needed to obtain (local) advice from a specialist.
