Q:
We’re a flooring company currently working on a new build supplying and installing carpet and vinyl. Do we charge vat on everything or only on the carpet as vinyl is classed as part of the building, what about the labour part of fitting the vinyl?
Many thanks
A:
Hi
A few points here. As you probably know VAT and property stuff is complex so I have to explain the general rules.
This information is on the HMRC website VAT Notice 708: Buildings and Construction. It’s a long notice and only parts of it are relevant to you, but here is the link http://tinyurl.com/lvluo3.
As you already know you can zero rate most services and some goods that are supplied in the course of construction of certain new buildings. These are new dwellings, and certain “relevant residential properties” and “relevant charitable properties”. There is a full explanation of the properties concerned at section 3 of the Notice. It does not include commercial property so if you are supplying and fitting any sort of flooring in a commercial property, the whole lot is liable to VAT at the standard rate.
But in the case of dwellings and the other properties listed at section 3 of the Notice, supplies of services “in the course of construction” of a new building are zero-rated along with items, ie building materials, that are incorporated into the building.
The building materials that qualify are listed at section 13 of the Notice and paragraph 13.7 reads as follows:
“Carpets, carpet tiles and underlay are not building materials for VAT purposes.
Other forms of flooring or floor covering, such as linoleum, ceramic tiles, parquet and wooden floor systems are building materials.”
So the normal rule is that the supply and fitting of vinyl tiles is zero-rated, but the supply and fitting of carpets is standard rated.
Hope this helps, but do have a look at the Notice to be sure and let me know if you have any further queries.
Kind regards
Marie