There is often confusion about how and when to charge (or what you pay if you are a customer) on new build properties.
Here's what HMRC says:
You can zero-rate the work you do on the building itself - as long as the work relates to its construction. This also applies if you're a sub-contractor who's working for another builder. You can also zero-rate work that is closely connected to the building project.
If you hire out goods to your customer then you must always charge VAT at the standard rate. But if you supply plant with an operator - like a digger and a driver - then you can zero-rate the charge as long as you meet all the other conditions for zero-rating.
For design work:
Professionals like architects, designers and surveyors must always standard-rate the services they supply. But if you provide a single 'design and build' contract to a customer for a new house or flat then the whole of what you charge qualifies for zero-rating. A design and build contract means that the architect or designer is working for you and not for your customer.
Works that can be zero rated:
- creating access such as paths, driveways, patios, roads and parking areas
- making security features such as walls and gates
- basic soft landscaping - this means putting down top soil and laying grass - but only if this is required by the terms of the planning consent
You can't zero-rate the following work:
- landscaping, apart from the minimum that's required by the planning consent
- constructing external tennis courts and swimming pools - these are always standard-rated for VAT