3rd February 2014
Zero rate relief from VAT has historically been available to approved alterations to listed buildings used for residential purposes.
In March 2012, changes were introduced to restrict (and ultimately withdraw) the zero rate relief from VAT in respect of certain works to listed buildings, with effect from October 2012. In implementing these changes transitional relief applies for schemes where approval had been granted on or prior to 21 March 2012, for a period ending 30 September 2015; providing a three year period for relevant approved schemes to be completed.
The zero rate continues to apply where listed building consent was granted on or prior to 21 March 2012 – and has scope to apply for variations to that consent, as well as subsequent approvals relating to the materials used within the development. Owners of residential listed buildings and their developers should ensure that the zero rate is optimised, as VAT charged in error may be difficult to adjust and increases the overall costs of the project.
For example, an application for listed building consent submitted in December 2011 and approved in February 2012, on condition that details of materials to be used for the roof and windows are submitted for approval prior to installation. The work started in September 2012, and details of the materials duly submitted for approval in January 2013. The approval for the materials is part of the consent issued prior to 21 March 2012, and the zero rate applies as per the transitional rules.
There may also be scope to apply the zero rate where the local authority had been engaged in detailed pre-application advice prior to 21 March 2012, but where final consent was not granted until later.
To find out more on the extent of the zero rated relief for work to listed buildings, please email firstname.lastname@example.org