Cladding Projects, Energy Efficiency Improvement works and VAT

Across a range of our client sectors from construction services, universities, residential providers and particularly our housing associations, projects involving the replacement of cladding on residential blocks continue to be important projects. In addition we are starting to see sources of government funding coming into the market to enable delivery of such projects.

VAT at 20% on the works of recladding is the starting point for any budget but for many of our VAT sensitive clients this will certainly limit the scope of works that can be undertaken as budgets have to fund VAT costs that cannot be recovered. We’ve been working with clients facing these challenges and engaging directly with HMRC to establish routes to mitigating the VAT costs they face.

We would genuinely encourage anyone planning such recladding projects on residential developments to consider the VAT options available to them at the earliest point in the project planning stage – it could save time on delivery as well as significant project costs.

The same is true of the wide range of Energy Efficiency Improvements Projects we are seeing. There are added complexities in this area as the nature of VAT reduced rating is that the law does not allow for the apportionment of a single project into the elements which could qualify for the Reduced VAT rate as distinct those subject to the Standard VAT rate. The nature of the works, their extent and the intention behind such projects are all aspects we look at when discussing with HMRC the application at the VAT reduced rate, so again – engaging with VAT specialists at the earliest point in the project planning will be vital.

This is an on-going area of activity, therefore if you or your clients are planning similar projects do give us a call on 0330 124 7740 or use emailus@centurionvat.com to get in touch.

Definitely an area where VAT has got complicated!

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