- New HMRC publications address VAT on cladding remediation work following the Grenfell fire
- Buildings with unsafe cladding require replacement, incurring VAT costs
- HMRC Brief clarifies policy on VAT deduction for cladding remediation on residential buildings
- VAT costs arise during remediation of buildings with fire and safety defects
- VAT recovery depends on whether work is considered snagging
- Snagging allows VAT treatment to follow the liability of the original building work
- Zero-rated if original construction was a zero-rated new residential building
- Non-snagging remedial work is standard rated
- Standard rated work’s VAT may be recoverable under certain conditions
- HMRC defines snagging as remedial works to correct faults under original contract terms
- Snagging includes faults found soon after completion and covered by the building contract
- HMRC Guidelines for Compliance GfC11 provide further details on VAT treatment and recovery for remedial works
- Guidelines include definitions, recovery conditions, examples for VAT treatment, and documentation advice
- HMRC confirms no change in policy regarding VAT on remedial works
Source: marcusward.co
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.
