Self-build Vat / Company Formation

erw fran

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77
Has anybody started up a company for the purpose of a self-build in order to reclaim the VAT paid on materials & supples? I imagine there are quite a few complications but as you can buy off the shelf companies for about E500 I thought it might be an idea. I would be extremely grateful for any experiences or obvious implications that wouldn't make this possible.
 

Berlin

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158
Fran,
Sorry but it won't work. If the Company builds the house, it owns the house. If you then buy the house from the Company, the Company becomes liable for tax on the sale.
 

hjrdee

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160
surely the company could just be contracted to build the house. once the land and property were in personal name, how would the company own the house?

Presumably there would be corp. tax to pay on co. profits and some form of related party transaction would occur. Also I suppose the company would be claiming back the VAT, which you would then have to get out of the company.

Interesting idea though and should be looked into further.
 

jem

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560
and the company would have to charge vat on teh building work, accountancy fees/ auditor feed, cro fees and as it wouldn't be at arms lenght the revenue would probably disalow anyway.
bottom line doesn't work/ wont work, live with it.
 

erw fran

Frequent Poster
Messages
77
thanks for your replies - in my "dreams" I was thinking more about the supply end of things, the company wouldn't own the house but would provide the supplies which would then be sold at a lower price to the individual so that + vat would equal the cost, I think the problem is that I don't think companies can sell at less than cost price similar to tesco not being able to sell at less than cost price but I did hear on the news that this may be abolished. With regards to professional fees a tiny company really wouldn't incur that much as there would only be a handful of transactions. Anyway, you are right we'll just have to live with it, its very annoying though particularly as you don't pay VAT in the UK on the house build and stamp duty is far less on the land, but then I suppose land is much dearer there.
 
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