Do I pay VAT on building work?

Short answer

Extensions, loft conversions and renovations on an existing home are standard-rated at 20%. Building a qualifying new home is normally zero-rated, and converting a non-residential building into a home, or renovating a home empty for two years or more, usually qualifies for the reduced 5% rate.

Standard rate: 20%

Most work on existing homes: extensions, lofts, garage conversions, renovations and repairs. Our guide prices for these include VAT at 20%.

Zero rate: 0%

Construction of a new dwelling by a VAT-registered builder is normally zero-rated, including many building materials supplied with the work.

Reduced rate: 5%

Converting a non-residential building (such as a barn) into a home, changing the number of dwellings in a building, and renovating a home that has been empty for at least two years can qualify.

DIY housebuilders

If you build your own home or conversion and buy materials yourself, you can usually reclaim VAT through HMRC’s DIY housebuilders scheme.

Get it right before you start

The VAT treatment depends on the facts of each project, so we confirm the rate in your quote and, where needed, the evidence HMRC expects.

Sources and further reading

This guide is general information, not legal or tax advice. Rules change and depend on your property; we confirm what applies to your project at the survey.