Understanding VAT Implications for Cladding Remediation Work: HMRC Guidelines and Compliance

• HMRC released Revenue and Customs Brief 3 2024 on VAT for cladding remediation on residential buildings
• The brief explains VAT deductions for cladding work linked to original construction as snagging
• Snagging work follows the VAT rate of the initial construction, either reduced or zero
• Remediation not linked to initial construction is charged at the standard VAT rate
• VAT on snagging can be recovered following normal rules
• VAT on other remedial works may be recovered if linked directly to general business activities
• Guidelines for Compliance GfC11 provides details on VAT treatment and examples for applying rules

Source: taxscape.deloitte.com

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.