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How to make a claim

Timing

You can't claim as the work goes along - you have to wait until it's finished according to the original building plans you submitted. If in doubt, you can wait until the local planning authority issues a certificate of completion.

You must make your claim within three months of completing your conversion or building work. If you can't, you must write to HM Revenue & Customs (HMRC) to explain the reason for the delay.

HMRC will acknowledge receipt of your claim by letter within ten working days and try to ask any questions they have about your claim at the same time. You should normally get your refund within 30 banking days of them receiving your claim.

VAT invoices

First, before you can make a claim, you need to make sure you have all the right paperwork in place. That means getting VAT invoices for everything, and they have to be correct. If you've been charged the wrong rate of VAT, then you can't claim.

For example, if you find out you've been charged VAT in error for services that should have been zero-rated, you can't claim it back from HMRC. However, your builder might be able to get a VAT refund by adjusting his account with HMRC. But don’t leave it too late. Your builder will have a limited amount of time to correct his VAT account with HMRC. He is likely to refuse to make a correction if it is out of time.

VAT invoices must show:

• the supplier's VAT registration number
• the quantity and description of the goods and/or services
• your name and address if the value of the goods and/or services is more than £100
• the price of each item
  

Making the claim

If you are constructing a new dwelling you must complete form VAT 431NB to make your claim. If you are converting a building (that was previously non-residential) into a dwelling you must complete form VAT 431C to make your claim.

It's a lot easier to do this as you go along, so it makes sense to obtain the forms before you start work. See below for links to download these forms which are accompanied by guidance on how to complete them.

The notes explain the completion process on a step-by-step basis. They also tell you how to calculate your claim and what documents you will need to send in to support it.

You should keep a copy of your claim in case HMRC need to ask you any questions about it. You must send your completed claim to the address shown in the notes that accompany the form.

Evidence of completion

HMRC will accept any of these as evidence that the work is finished:

• a certificate or letter of completion from the local authority, for Building Regulations purposes or otherwise
• a habitation certificate or letter from the local authority - or in Scotland, a temporary certificate of habitation
• a valuation rating or Council Tax assessment
• a certificate from your bank or building society with the wording below
  

'This is to certify that the ...... Bank/Society released on ...... (date) the last instalment of its loan secured on the dwelling/building at ........... because it then regarded that building as complete.'

• Download VAT431NB VAT refunds for DIY VAT refunds for DIY housebuilders (Claim form and notes for new houses) Opens new window

• Download VAT431C How to claim a VAT refund for converting an existing building into a dwelling (Claim form and notes for conversions) Opens new window

Working out your claim

When you work out the total for your claim, you must take off any credits or discounts given by your supplier, such as for returned goods or bulk purchases.

If you've been charged VAT by your supplier, the invoice will normally show the amount of VAT separately. You'll need to check your invoices carefully for the amount of VAT you've been charged.

The standard rate of VAT is 20 per cent but was 17.5 per cent for the period 1 January 2024 to 3 January 2011. This means you might be claiming back VAT at both rates.

Sometimes only the VAT-inclusive amount and the VAT rate will be shown on the invoice. These examples show you how to work out how much VAT is in a VAT-inclusive amount.

If the VAT you've been charged is 20 per cent and you've got a VAT-inclusive amount of £120:

• take the VAT-inclusive price of £120 and divide it by 1.2 - this gives £100 which is the VAT-exclusive amount
• take away the VAT-exclusive price from the VAT-inclusive price - that's £120 less £100
• the result is the VAT amount of £20

If the VAT you've been charged is 17.5 per cent and you've got a VAT-inclusive amount of £117.50:

• take the VAT-inclusive price of £117.50 and divide it by 1.175 - this gives £100 which is the VAT-exclusive amount
• take away the VAT-exclusive price from the VAT-inclusive price - that's £117.50 minus £100
• the result is the VAT amount of £17.50

Where an invoice includes goods and services that you can't claim for, you must reduce your claim by an appropriate amount.

If you receive an all inclusive invoice from a contractor, you must be able to show that the amount of your claim is fair and reasonable. For example, by using tendering, estimation or specification documents agreed with your contractor.