Self Build/Development for amateur sporting club

Hi

I am a member of an amateur sporting club that will shortly be undertaking a development (indoor arena).

Work will be done by members and volunteers as far as is possible.

Contractors will be required at various stages of the development, erecting the structure, various building and electrical work, etc, while material costs such as concrete, blocks, etc will also be incurred.

As we have no VAT recovery we want to make sure that no unnecessary tax costs are incurred.

In this regard, I understand that most building materials are taxable at 21.5% (bar concrete and blocks), while building services is generally 13.5%, hence an opportunity could exist to save this VAT cost by getting the building contractor to purchase these materials and then include them in their total invoice and charge a total of 13.5% VAT (obviously 2/3rds package rule would need to be met also)? Would my understanding be correct?

Would any RCT or other tax issues exist for the club in respect of this development?

Thanks

The Builder can only charge the full invoice at 13.5% where the materials will form part of a fixture (eg wall, tiling etc) and yes, the 2/3rds rule will have to be satisfied

RCT only applies where subbies are used by the principal contractor and as the sports club is not a principal contractor then RCT will not apply - it would be similar to a house-owner getting an extension built

Thanks

As a follow up question, we may look to purchase some cladding, steel and other materials, etc directly from the UK.

As we are not registered for Irish VAT, if we purchase direct we will suffer UK VAT and cannot recover this cost.

If the goods acquired exceed €41k in a year (which could be likely), we will be required to register for Irish VAT and self account for Irish VAT on these purchases. In this scenario, as we do not make taxable supplies, we will be unable to claim a corresponding input credit in respect of the VAT incurred? Is this correct? Or would it be VAT neutral on the self account basis?

Finally, if we arranged for the building contractor to purchase these materials from the UK on our behalf, they would self account for Irish VAT, and charge us VAT at 13.5% (provided the 2/3rds package rule is satisfied). Hence, we could possibly save on VAT cost here if the applicable UK VAT rate was higher than 13.5%? Again, is my understanding correct?

Thanks

Yes!

You will be obliged to register if the cost of the goods exceeds €41K but you not be entitled to claim an input credit for any of the VAT incurred.

If the builder were to purchase the goods on your behalf then the UK supplier does not charge them any VAT and the builder must self-account for the VAT on same (effectively NIL VAT movement). The builder then charges you in the normal course of business.

Thanks again!