Last chance for VAT exemption alterations


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As announced in the Budget in March 2012, the 0% VAT rate for approved alterations to listed buildings will expire on October 1st 2012 and revert to the standard VAT rate of 20%.

To comply with the current regulations the listed building must either be used for residential or charitable purposes and the work that is to be carried out must be an alteration rather than a repair. Furthermore, the work must receive listed building consent for any alterations to be VAT exempt.

Stuart Thornhill, a Chartered Building Surveyor for Jonathan Cornes Associates commented: “The property repair or alteration process can take a number of weeks to be approved so it is pivotal that any required alteration works are started as soon as possible so that they can benefit from the VAT exemption”.

How to benefit from VAT exemption on listed buildings

To benefit from the VAT exemption, any work must be completed and invoiced before October 1st. This means that there is very little time to gain approval for an alteration project and have it completed. Any works that remain uncompleted by October 1st will be subject to the standard 20% rate of VAT.

However, various heritage organisations have successfully lobbied the Government against the VAT changes to listed buildings. They have successfully approved an amendment that now confirms as long as the building has consent for alterations before March 21st the zero-rate for VAT is applicable until September 30th 2015.

The Rotter comments on VAT exemption for listed buildings

Les Meikle, a.k.a. The Rotter from Wise Property Care said “the VAT exemption for listed buildings has been a great success. Over the last few of years we have been part of a number of projects for alterations on listed buildings to ensure no damp proofing or dry rot issues emerge. The VAT exemption has helped these projects go ahead and without the exemption, in some cases, these alterations would not have been able to go ahead.”