Home improvements and VAT

Wibbles

poppy123456 said:

Is it just a toilet or a bathroom as well? If it's a bathroom, is this being moved from upstairs to downstairs?

It's a wet room and the upstairs bathroom is staying

Wibbles

Any advice re the planned double exit doors - security wise? 

OverlyAnxious

Wibbles said:

Any advice re the planned double exit doors - security wise? 

I guess that's been done for easier wheelchair access?  Would be good to get out in the garden if you're currently unable to.

In reality, I doubt they're any less secure than a single door.  They'll have multi-point locks, making the frames very secure.  But if someone really wanted to gain entry, they could just break the glass, regardless of it being single or double.  

2oldcodgers

Nothing to do with toilets or kitchens but more to do with VAT. After 20 years of putting up with the 'normal' front and back doors as provided by the developers we decided to upmarket both.
Not cheap and certainly not plastic! We chose the doors we wanted and was asked what sort of threshold we wanted (I thought that they were all the same)
. It seemed not that if we wanted a low one then that will be classed as a disability one. Uh? Then the light dawned - it was more or less level with the floor for wheelchair access. That meant that the whole deal, doors, frames and fitting was to be 0 rated for VAT. The savings were a nice surprise - £600 cheaper for the whole lot. 
No idea how they get away with it as the door is a door that anybody can use we certainly did not specify that it had to disability friendly!

yanni

"The council may pay the grant:

• direct to the disabled person; or
• direct to the contractor.

If the grant is paid to the contractor you should check the contractor’s records to ensure that:

• the invoice clearly stated that the work was done for the disabled person; and
• VAT was not charged on zero-rated work."

This is saying that whoever is paying the disabled grant - the council or the person in receipt of the disabled grant - to the contractor should check that the contractor is not charging VAT on non-VATable (zero rated)  work (such as installing a disabled bathroom or a ramp). It is not saying that no VAT is payable if the work is paid for by disabled grant.

 VAT is applied to a good or service. VAT is either chargeable or not regardless of who is paying for it so you are not paying more because you are paying for the work yourself.  

 VAT is a ‘pass-through’ tax. If a business is VAT registered is can claim back VAT on its VATable purchases but it has to charge VAT on its VATable sales.  The purchase and sales VAT are netted off against each other and the difference is paid over to HMRC.

If councils didn’t pay VAT on work paid through a disabled grant you would have the situation that the builder could claim back the VAT on his purchases for building and fitting your  kitchen extension but not have to pay any sale VAT over to HRMC because the council doesn’t / wouldn't pay VAT to the builder on work paid for by disabled grant. The only person who would benefit from such a system is the builder and I don’t think HMRC are going to allow that! 

 

If you are buying kitchen fittings that are purposefully designed for someone with a disability - one with the kind of adaptions mentioned in the Softley Ltd case above such as a knee space hob and dropdown/ pullout cupboard fittings - then they would be VAT exempt because they have been designed solely for disabled people.

 

Disabled bespoke designs will ordinarily cost more than a standard kitchen unit and therefore the disabled person would be incurring extra costs because of their disability.The VAT exemption goes some way to reducing the cost to what a non-disabled person would pay for standard kitchen units.

 

If you are buying standard kitchen fittings they are not VAT exempt.  A disabled person will not have incurred any extra costs in buying standard kitchen units that a non-disabled person would not have also incurred so there is no reason for a VAT exemption.

I appreciate that you are having to fund these adaptions (rather than choosing to do it) and in an ideal world you shouldn’t have to be out of pocket because of a disability but unfortunately it is not an ideal world.

Widening a doorway to allow wheelchair access to a room is VAT exempt https://www.gov.uk/guidance/vat-relief-on-certain-building-work-if-you-have-a-disability#building-work-vat-free

The cost of replacing the space lost by the new bathroom is also VAT exempt https://www.gov.uk/hmrc-internal-manuals/vat-relief-for-disabled-people/vrdp11550

Wibbles

yanni said:

"The council may pay the grant:

• direct to the disabled person; or
• direct to the contractor.

If the grant is paid to the contractor you should check the contractor’s records to ensure that:

• the invoice clearly stated that the work was done for the disabled person; and
• VAT was not charged on zero-rated work."

This is saying that whoever is paying the disabled grant - the council or the person in receipt of the disabled grant - to the contractor should check that the contractor is not charging VAT on non-VATable (zero rated)  work (such as installing a disabled bathroom or a ramp). It is not saying that no VAT is payable if the work is paid for by disabled grant.

 VAT is applied to a good or service. VAT is either chargeable or not regardless of who is paying for it so you are not paying more because you are paying for the work yourself.  

 VAT is a ‘pass-through’ tax. If a business is VAT registered is can claim back VAT on its VATable purchases but it has to charge VAT on its VATable sales.  The purchase and sales VAT are netted off against each other and the difference is paid over to HMRC.

If councils didn’t pay VAT on work paid through a disabled grant you would have the situation that the builder could claim back the VAT on his purchases for building and fitting your  kitchen extension but not have to pay any sale VAT over to HRMC because the council doesn’t / wouldn't pay VAT to the builder on work paid for by disabled grant. The only person who would benefit from such a system is the builder and I don’t think HMRC are going to allow that! 

 

If you are buying kitchen fittings that are purposefully designed for someone with a disability - one with the kind of adaptions mentioned in the Softley Ltd case above such as a knee space hob and dropdown/ pullout cupboard fittings - then they would be VAT exempt because they have been designed solely for disabled people.

 

Disabled bespoke designs will ordinarily cost more than a standard kitchen unit and therefore the disabled person would be incurring extra costs because of their disability.The VAT exemption goes some way to reducing the cost to what a non-disabled person would pay for standard kitchen units.

 

If you are buying standard kitchen fittings they are not VAT exempt.  A disabled person will not have incurred any extra costs in buying standard kitchen units that a non-disabled person would not have also incurred so there is no reason for a VAT exemption.

I appreciate that you are having to fund these adaptions (rather than choosing to do it) and in an ideal world you shouldn’t have to be out of pocket because of a disability but unfortunately it is not an ideal world.

Widening a doorway to allow wheelchair access to a room is VAT exempt https://www.gov.uk/guidance/vat-relief-on-certain-building-work-if-you-have-a-disability#building-work-vat-free

The cost of replacing the space lost by the new bathroom is also VAT exempt https://www.gov.uk/hmrc-internal-manuals/vat-relief-for-disabled-people/vrdp11550

Thank you

That is very interesting - especially the link you the "space lost due to...." 

HMRC failed to tell me that in their response

Wibbles

HMRC are now saying

"You have asked why a kitchen is eligible for zero rating when purchased using a disabled facilities grant, but standard rated when purchased by an individual.

This is incorrect- VAT relief isn't given on the construction/purchase of a kitchen, regardless of how it is paid for, even if it is for a disabled person as stated in the VAT Notice above."

THIS IS INCORRECT

Wibbles

HMRC have conveniently forgotten to mention "lost space" in their response

I have reminded them !!

"https://www.gov.uk/hmrc-internal-manuals/vat-relief-for-disabled-people/vrdp11550

Lost space

Whilst the law applies the zero rate to the installation, extension or adaptation of a bathroom, washroom or lavatory, where it is necessary because of the disabled customer’s disability, HMRC interprets this to include works that are necessary to restore lost space within the customer’s private residence.

From 26 August 2019, HMRC’s interpretation of the ‘lost space’ allowance is as follows:

(a) Where a bathroom, washroom or lavatory has been installed, extended or adapted in a disabled person’s private residence, because of their condition, the work may be zero-rated (see paragraph 6.3).

(b) If the works involved have reduced the size of another room within that private residence there will be ‘lost space’.

(c) The works necessary for making good that ‘lost space’ can be regarded as part of the work essential to the provision of the bathroom, washroom or lavatory. The restoration of that ‘lost space’, but only that ‘lost space’, by restoring the room itself to its original size, can also be zero-rated. This can be done through internal works or by extending outwards or upwards.

I will lose half of my (already undersized and inaccessible) kitchen due to access required for a downstairs bathroom (the extension access through the existing kitchen window converted to a door) – I assume that this means that the new kitchen (same size as previous) will be zero VAT rated ?"

Wibbles

Work starts in a week and my builder has confirmed vat free 

Jimm_Scope

Sorry to hear your kitchen is being shrunk even more. I'm glad you at least found out it won't be taxed.  I do hope it means you can more comfortably and easily live in your home though.

Wibbles

We are only able to get the wetroom constructed VAT free - at the front corner of the house - the kitchen is staying the same (I am UNABLE to access any cooking facilities from my wheelchair myself and have to rely on my wife)

It appears that when it comes to home improvement grants from the council - they class the following facilities as vital for a disabled person to be able to access :

 A LIVING ROOM

(c)facilitating access by the disabled occupant to a room used or usable as the principal family room;

 A BEDROOM

(d)facilitating access by the disabled occupant to, or providing for the disabled occupant, a room used or usable for sleeping;

 A TOILET

(e)facilitating access by the disabled occupant to, or providing for the disabled occupant, a room in which there is a lavatory, or facilitating the use by the disabled occupant of such a facility;

 A BATHROOM/SHOWER

(f)facilitating access by the disabled occupant to, or providing for the disabled occupant, a room in which there is a bath or shower (or both), or facilitating the use by the disabled occupant of such a facility;

 A WASHBASIN

(g)facilitating access by the disabled occupant to, or providing for the disabled occupant, a room in which there is a washhand basin, or facilitating the use by the disabled occupant of such a facility;

 A KITCHEN

(h)facilitating the preparation and cooking of food by the disabled occupant;

But not vital enough to offer VAT free purchase, except for e, f and g

The rules are wrong and need updating !!