A number of changes to the VAT DIY housebuilders scheme come into effect on 5 December 2023. The claim deadline is extended to six months and digital claims will become possible. 

The DIY housebuilders scheme allows individuals who build their own home 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 comes into effect from 5 December 2023, making a number of changes.

For claims made on or after 5 December 2023:

• The claim time limit is extended from three months to six months, following the completion of the build.
• Taxpayers will have the option of submitting their VAT claim digitally.
• Invoices will no longer need to be submitted when the claim is made.

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 prior to 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

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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