VQOTW: DIY claim and EU vat

My client is in Northern Ireland and is building his own house.  He sourced his kitchen equipment in the Republic of Ireland and because he is a private individual, not VAT registered, has been charged Irish VAT. We did question whether the supplier should be charging UK VAT under the distance selling rules but were informed that he had not yet breached the threshold.

He is approaching the end of the build now and we will be preparing his DIY claim shortly.  Can this VAT be recovered under the scheme?

Entitlement to VAT recovery for self-builders and converters is granted by Section 35 of the VAT Act. Historically it included reference to VAT charged in other member states in Section 35(3).  However, since the departure of the UK from the EU, this sub-paragraph has been removed.  The provision has been added in the new Schedule 9ZA paragraph 18A(2) onwards as follows:

18A(2)  Where–

(a) a person carries out works to which this paragraph applies,

(b) the carrying out of the work by the person is lawful and otherwise than in the course or furtherance of any business, and

(c) VAT is chargeable in accordance with the law of a member State (see paragraph 80) on the supply of any goods used by the person for the purposes of the works,

the Commissioners must, on a claim made in that behalf, pay to that person an amount equal to that VAT so chargeable.

18A(3)  The works to which this paragraph applies are–

(a) the construction of a building in Northern Ireland designed as a dwelling or a number of dwellings;

(b) the construction of a building in Northern Ireland for use solely for a relevant residential purpose or relevant charitable purpose;

(c) a residential conversion of a building, or a part of a building, in Northern Ireland.

Subparagraphs 4 to 7 refer back to Section 35 to confirm that the normal rules under that section apply in respect of recovery of VAT charged under the rules of another member state.

Therefore, Irish VAT charged on building materials can be included in your client’s DIY claim.  The amount should be converted into sterling; this can be done using HMRC’s period exchange rate for the month of purchase.

Prior to 1 July 21 distance sales of goods into Northern Ireland would have had a threshold of £70,000 in a calendar year.  From 1 July the pan-EU threshold is €10,000 or £8818 so a kitchen supplier making sales from the EU into Northern Ireland would breach this threshold very quickly and be required to VAT register in the UK and charge UK VAT.

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Senior VAT Consultant
0844 892 2470


Viv has worked in VAT since 1989, when she joined HMRC as an Assurance Officer. Before joining the team as a consultant in 2000, she had spent five years dealing with written and telephone enquiries at a local VAT office.

In 2007/ 2008, she spent a year with a major accountancy firm gaining experience of VAT from a different perspective and developing skills which are relevant to her current role.

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