VAT ON LISTED BUILDINGS

It is generally agreed that when building a new conservatory attached to a listed building or property, that the cost of building the conservatory will be zero rated for VAT purposes. HM Revenue & Customs describe a listed building as one that falls within:

Planning (Listed Buildings and Conservation Areas) Act 1990; or
Planning (Listed Buildings and Conservation Areas) (Scotland) Act 1997;

Or is a scheduled monument, within the meaning of the Ancient Monuments and Archaeological Areas Act 1979.

In England & Wales this means that zero rating will apply if the property is:

Grade I – a building of exceptional interest
Grade II* – an important building of more than special interest
Grade II – a building of special interest, warranting every effort of preservation

However, before proceeding you must ensure that the conservatory is an approved alteration and has received listed building consent from your local planning authority. You must also put in writing to your builder(s) and installer(s) notification that zero VAT rating applies and that the building is used for residential purposes. You should also note that the work can only be carried out by VAT-registered builders.

Alternatively, you can ask your suppliers to issue you with VAT invoices and you can claim the VAT back from HM Revenue & Customs, although this may take a while and you will be out-of-pocket in the meantime; so it is not recommended.

The rules on zero rated VAT can be quite complicated, for example, the zero VAT rule doesn’t apply to fees charged by designers and architects or for repair and maintenance work on listed buildings. We also recommend that you keep all paperwork relating to zero rated VAT, including correspondence with your local planning authority and all receipts and invoices, in case a VAT inspector requests them sometime in the future. Please note that the supply of goods or services when building a conservatory for a listed building are not VAT exempt, just currently zero-rated.

For further advice speak to your accountant or Contact Us for our best interpretation of the rules.

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