VAT on new build projects, the sub-contractors responsibilities.

[Sean Dreux]

Hi,

I understand that the VAT on a new build project is Zero rated. I intend to supply and install windows to the project as a sub-contractor. The windows will be manufactured for me by my supplier, who will charge me 20% VAT. Do I charge the client the standard VAT rate on materials and labour for the client to then apply for a rebate? I have other clients whose projects qualify for a reduced 5% rate.

Thanks

 

[Mr D]

Are you vat registered?

 

[Sean Dreux]

Hi,

Yes I am.

 

[Scalloway]

If it is a new build you must zero rate your supply.

 

[Sean Dreux]

Thanks. I can’t expect my supplier to zero rate the new joinery though? On this project, the VAT on this would be about £13000 which have to be reclaimed by me through my quarterly VAT return. Is this correct?

Thanks

 

[Scalloway]

Your supplier standard rates his supply to you. You reclaim the VAT on your next VAT return and zero rate your supply to your customer as you know it is a new build.

 

[Sean Dreux]

That’s great, thanks for your help.