A number of changes to the VAT DIY housebuilders scheme came into effect on 5 December 2023. Claims can now be made online and the claim deadline is extended to six months. HMRC have just published a collection of new guidance on obtaining a VAT refund under the scheme.

The DIY housebuilders scheme allows individuals who build their own homes to recover the VAT they incur on goods and services in its construction. This puts them in a similar position to someone who buys a zero-rated new build house directly from a property developer.

Following announcements made at the 2023 Spring Budget, a new Statutory Instrument came into effect from 5 December 2023, making several changes: 

  • A new online claims service has been launched, allowing DIY housebuilder VAT claims to be submitted digitally.
    • Invoices no longer need to be submitted when a claim is made.
  • For buildings completed on or after 5 December 2023, the claim time limit is extended from three months to six months, following the completion of the build.

The current paper-based claim process will continue to be available.

Where claims relate to a residential conversion from a derelict building or shell, evidence of the Non-residential status of the building before its conversion may be required by HMRC.

Useful guides on this topic

Land & Property: DIY Housebuilders scheme
It is possible to recover VAT on constructing a new residential dwelling, or dwellings, even where there is no planned sale of the property. This recovery can arise under the special refund scheme for DIY housebuilders.

Land & Property VAT (Subscriber guide)
An outline of the VAT treatment of some of the more common supplies of land and property.

Land & Property: Dwellings
What is a dwelling for VAT purposes? What is the VAT treatment for the construction, conversion, sale and letting of a dwelling?

Land & Property: Non-residential
This guide considers the VAT treatment of the supply of non-residential property.

External links

HMRC: Collection on Claiming Refunds on VAT DIY scheme

Legislation: SI 2023/1201: The Value Added Tax (Refunds to “Do-It-Yourself” Builders) (Amendment of Method and Time for Making Claims) Regulations 2023

Policy Paper: VAT: Digitisation of claims and extending time limit for DIY Housebuilders Scheme

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