Household Automation provides a variety of design installation and programming services to self builders, builders and developers building new properties. This article may point you in the right direction if you are seeking to find out what products can and cannot be rated for 0% VAT in new build properties.
If you are mystified by 0% rating of products in new build then the best place to start is by downloading the recently up-issued 'Notice 708 Customs:Buildings and Construction November 2011' obtainable from the HMRC web site.
The document will provide you with an overview of when and where the reduced rates apply. More specifically in relation to electrical products the following sections are of more use.
11. Supplies of building materials by contractors
12. Developers: building materials and other Goods
13. The VAT meaning of 'building materials'
13.6 Electrical and gas appliances
13.8 Examples of articles 'ordinarily' incorporated in a building
13.9 Examples of articles not 'ordinarily incorporated in dwellings
Some items are clearly defined, burglar alarms for example are zero-rated, audio equipment (including remote controls and speakers) are not. Other items are reasonably defined but you will struggle to see the logic! Door entry systems incorporated into say a block of flats or apartments are zero-rated, a door entry system in a single dwelling is not! The real problem starts to occur when the item you are assessing is not listed or
-- Advertisement --
there is clarity missing in the description or the product is integrated and can perform multiple tasks e.g. we believe a wall switch that manages lighting and heating is zero rated but the same wall switch programmed to do lighting and gate control is not!. However all is not lost because you can now download 'Construction HMRC Reference; V1-8A' from the HMRC web site.
This provides actual examples and sites actual cases - '13.5.2 For example, in the case of F Booker (Builders and Contractors) Limited (VTD 446) the Tribunal recognised there are a number of different heating systems that can be employed in a building. It went on to say that it is absurd to have to await the adoption of a single method of heating before that type meets the test of 'ordinarily incorporated'. All types of heating systems are, therefore, accepted as being 'ordinarily incorporated' in dwellings by builders. Hot and cold water supplies are 'ordinarily incorporated' in buildings by builders. The use of lead pipes or gold taps does not affect this position. Similarly with lighting systems: all types of lighting systems are accepted as being 'ordinarily incorporated in dwellings by
builders'.
Here are some items that we believe are clearly defined. Go careful as you need to read the whole section and apply all of the rules and even then you may need to seek clarity from HMRC written referrals team.
Burglar alarms (zero)
Fire alarms and smoke detectors (zero)
TV aerials and satellite dishes (zero)
Satellite and Freeview boxes (standard)
CCTV (standard)
Plumbing any item from a thermostat to a gold plated tap may be zero rated
(zero)
We must point out that this article is based on our experiences to date and is in no way definitive. Of course every case is unique and we would recommend that if you are unsure weather a particular item can or cannot be zero rated then it is always best to contact the HMRC written referrals team direct.
Household Automation has ongoing projects with different manufacturers'
equipment. For advice on the best way to integrate your home go to the new
www.household-automation.co.uk web site or contact us direct.
