United Kingdom - New VAT rules to help renovators restore vacant properties

New rules for VAT on property renovations will encourage owners and developers to get on with restoring empty properties rather than leaving them to rot.

Since 1 January of this year, renovations and alterations to residential properties that have been empty for at least two years will be eligible for a reduced VAT rate of 5%.

Previously, the reduced rate only applied to property that had been empty for at least three years.

Contractors working on properties that fit the new timetable as of 1 January should account for VAT at 5% on supplies bought on or after that date.

‘Contractors should ensure they are fully aware of the tax point rules (see Notice 700 - The VAT Guide paragraph 14) when determining the time of their supplies,’ says HMRC.

Source : CityWire.co.uk - London, England, UK, dated 07/01/2008