Part Forty Three – Completion! (and getting the VAT back……………..)

After much faffing around with details and paperwork, we finally have a Completion Certificate!

 

Getting things ready for the final Building Control inspection turned out to be an exercise in doing loads of work that wasn’t actually needed.  Very frustrating, but a consequence of me not having been through the process before, and assuming that Building Control would want more evidence of compliance with the regs than they actually did.

I had prepared copies of things like the water usage calculations with evidence of measured flow rates from all outlets, and none of that was needed, for example.  I’d also prepared reasons justifying the three pressurised systems we have, and why they did not need sign off against Part G by a competent person, and again none of that was needed.

In the end, when I’d got everything ready, with piles of paperwork stacked up ready to be checked, it turned out that the Senior Building Control inspector who came out was so enthusiastic about the build that he walked around for five minutes and declared he’d issue a Completion Certificate that afternoon.  All he needed was my confirmation that the SAP EPC and the Part P certificates had been lodged on the appropriate databases, and that was it.  The only thing actually checked was that the rear door entrance ramp, external wheelchair turning space, rear door threshold and width and downstairs WC access were Part M compliant, but this was just a visual check – nothing was measured.

I did give him a good walk around the whole house, pointing out all the things that had been done in accordance with the regs, but to be frank, I think he just sort of assumed from my general approach that I had complied with everything, and nothing was checked in detail at all.  This placed quite a lot of trust in me, as the previous inspection had been when the insulation was being pumped in, before the cladding went on or the roof, and before the wiring, plumbing, heating, plastering etc had been done.

Having got our Completion Certificate I set about putting the VAT reclaim together.  I’d been sorting out invoices and annotating them and adjusting the VAT where there were ineligible items listed, plus I’d kept copies of the exchange rates that applied at the time for everything purchased from the EU with VAT paid in another country.  To make things easier to handle, I stapled each till receipt to a sheet of A4 paper, and bound these in groups (using a hole punch and banker’s tags) so that each group of receipts matched a single page of the reclaim spread sheet form.  I recreated the receipt form parts of the VAT reclaim form as spreadsheet pages, which made getting the arithmetic right a lot easier (I can try and attach, or email, a blank of this spreadsheet form, if anyone wants it).  I also added a serial number hand written on each receipt, in order, and used an extra column on the form to list this number, which made double checking that the forms matched the physical receipts a great deal easier.

I took the view that the easier I made it for HMRC to check the less hassle we would get, so doing some things that weren’t strictly required, like arranging the receipts in date order and adding unique serial numbers, might make our lives easier.  Don’t underestimate the time it takes to do this!  All told I spent around 20 to 30 hours just compiling receipts, filling in the forms and cross-checking.  I then sent the whole lot off by secure, insured, delivery to HMRC and waited.

The first request back from HMRC, around 2 weeks later, was for a full set of plans and planning permission, together with a request for me to fill in a signed statement as to how much VAT should be removed from the claim for the value of the bike shed shown on the planning approval plans.

To say this was contradictory is an understatement.  I’d sent all the plans and all the planning permission documents with the receipts (as required), and they must have looked at them, as the planning permission plans included provision for a bike shed (required under the old Code for Sustainable Homes that applied at the time we submitted the plans).  Bike sheds, even when attached to a garage, as our proposed one was going to be, are NOT eligible for a VAT reclaim, even if they are a planning condition, or required by some regulation.  The fact that HMRC had picked up on the bike shed on the plans meant that they must have read the planning permission and plans I sent, so why ask me to send them again?

You can’t deal with them by email or phone, so the only thing to do was to send them a letter explaining that we didn’t build the bike shed, as the Code for Sustainable Homes requirement was withdrawn in between us submitting our plans and them being approved, so we’d verbally agreed with the planning officer not to build it.  I also included photos to prove we hadn’t built it (it was shown on the plans as a lean-to against the side of the detached garage) together with emails and the final conditions sign-off from the planning officer.  I also sent HMRC another copy of the planning permission and plans they’d already got – I assume they misplaced the ones they’d originally received and reviewed, hence them needing to ask me for another set.

Another couple of weeks went by and we received a letter telling us that well over £1800 pounds of our claim had been rejected, as it included an ineligible item and that the balance of £8,300 would be paid to us within 10 days by BACS transfer.  The implication was that this was the end of things, but they did give details of their appeal procedure.

I wasn’t too happy at losing well over £1800, so checked and found one error on our kitchen receipt that I’d not spotted.  We bought the kitchen units as supply-only, except the kitchen company also supplied the stone worktops, and they were supplied on a supply and install basis, as they had to template the kitchen after I’d built it, cut the stone to fit, then install it.  There was around £500 of VAT for this that shouldn’t have been charged.  The kitchen supplier should have put this on a separate invoice as a supply and install item.  I didn’t spot it amongst the dozens of lines on the kitchen receipt, and HMRC disallowed the whole kitchen unit VAT on the basis of this single error on the part of the supplier.

It was an error, too, as I’d given the kitchen supplier evidence that the supply and install part should be zero rated, and that VAT should only be included on the supply-only stuff.   I went back to the kitchen supplier, they pulled the file and found my copy of the house plans, the request from me to zero rate the supply and install part, together with their copy of the receipt.  They were happy to write a note saying that they had made an error on one item (out of around 40) on the kitchen receipt and confirm that all the kitchen components had been supply-only, except for the supply and fitting of the stone worktops.

I appealed to HMRC immediately, sending them an explanatory letter, with written evidence from the kitchen supplier, and they have said they will decide the appeal by 11 January 2017.  The kitchen supplier are also looking at how to refund us the ~£500 VAT they charged us in error.  They’ve admitted it was their error, but their accountant is working out how to deal with it.

My mistake, in part, as I didn’t spot that one line in the 40-odd items that made up the kitchen components.  It’s now in the hands of HMRC and the kitchen supplier as to whether we get all, or some, of that VAT back.

The moral of this tale is to check, check and check again, before you send your claim in to HMRC.  You cannot telephone them or email them to explain things or question anything, as they warn you that attempting to do so will increase the time it takes them to process your claim (my guess is that you go back to the end of the queue if you try and contact them, midway through the process).

We’re now in the process of getting our old house ready to market, hopefully not long after Christmas, and begin moving in to the new house, as the new furniture arrives (probably late January, early February).

All the house systems have been up and running for the best part of a year now, with a few teething problems, but nevertheless everything generally all works OK.  The temperature control is extremely effective.  Temperature stability is excellent, no matter what the outside temperature does, with the combination of relatively low mass, relatively high heat capacity, good surface conductivity, high insulation level, good airtightness and heat recovery ventilation and a tiny bit of heat put into the floor every day or two when it’s very cold, working well.

The key is that the house has a high thermal time constant, due primarily to the good insulation, high decrement delay factor and high heat capacity.  It proves beyond any doubt whatsoever that mass has sod all to do with maintaining a steady temperature, in fact I think there’s a strong case for advocating that too much mass and too little thermal capacity, could well end up with a less comfortable house.  This is, without a doubt, the most comfortable house we’ve lived in ever.

There have been a some changes to some of the systems, in the light of experience, so the next blog entry will focus very much on the house as-built, and this may well mean that some earlier blog entries may no longer represent what actually works.  Things evolved as we went along, primarily to do with the hot water system, the heating controls and the water treatment system.  For example, I found that controlling the slab temperature was a poor way to keep the house at a constant temperature, even though theory suggested it should be better, so the floor temperature sensing and control was removed and replaced by a much simpler room thermostat, that controls the house temperature far, far better than even the best proportional, weather compensating, floor temperature control I could device ever managed.

More on all this in the next episode.

8 thoughts on “Part Forty Three – Completion! (and getting the VAT back……………..)”

  1. Congratulations Jeremy on receiving the completion certificate. It’s been a long journey and I should imagine you are very pleased with what you have achieved.
    I found your comments concerning the VAT reclaim on your kitchen interesting. I have installed my kitchen and I had the granite worktops and upstands supplied and fitted by a local company. The invoice shows separate prices for the basic granite, the cost of cutting and grinding and for the installation. I wonder if I would be able to claim for the labour involved in working the granite. Something for me to look into carefully.

    1. Thanks Peter, it’s taken longer than it should have, as I was worrying about, and doing, things that really didn’t need to be done. At a guess I wasted around 3 months getting things clearly sorted out to ensure a “pass” at the completion inspection, including fitting water usage restricters and testing each and every one, on every outlet, documenting that (with photos and tests of flow rate) and writing it all up in accordance with the water usage calculation methodology in the regs. It turned out the building inspector didn’t need to see it, and just commented “it’s nice to see someone actually do it, though, rather than just put numbers on a form”…………………

      As we’re not on mains water, I’ve spent the best part of a week going around removing all the flow restricters, as we don’t actually need them now.

      The VAT was just a problem with the way the kitchen supplier made out the receipt. We bought the kitchen units and the worktops from the same supplier, and being a trade supplier they don’t offer a fitting service for the units, but sell them on a supply only basis. The stone worktops are different though, as they have to be made to measure and professionally fitted (having watched the guys fit ours I couldn’t have done it on my own). I did tell them to split out the supply only elements from the one supply and install part, but they forgot and I didn’t pick it up on the checks. So, because one line on a multi-page receipt with around 40 components on it says “template, supply and fit Silestone worktops” HMRC have assumed all 40 odd items were supply and fit, disallowed the whole VAT on that receipt and reported me for action for VAT fraud.

      In your case, the labour for working the stone and the installation should be zero rated by the supplier. If they charge you the VAT then HMRC won’t let you claim it back, and as I’ve found, if it’s on the same receipt as supply only components they will probably reject the whole receipt.

      I’ll know more in January, when our appeal is heard.

  2. Fascinating reclaim reading Jeremy. I guess our bike shed won’t get the VAT back either then, but as it has the gas & electric meters in it I consider it to be part of the dwelling. I will have to investigate the issues around this before making our claim, a long way away yet. I like the invoice coding system and I will copy that idea, in addition I am scanning the receipts in case they fade away, happens to till roll receipts.

    1. Hi Mike,

      No, bike sheds are specifically disallowed from VAT reclaim. They clarified this to me over the helpline, saying that although detached garages were considered a part of the dwelling, any other outbuilding that was not required to make the house habitable was excluded from being zero rated for VAT. I had to clarify this as we have a lean-to “shed” on the rear of the house that was added to put all the water filtration stuff. I had to make a specific case to them that without this outbuilding the house would not be a dwelling, as it was essentially for providing a potable water supply.

      You can try and get clarification as to whether an outbuilding for the purpose of housing gas and electricity equipment would be allowable. It depends what it’s called on your plans.

      To stop till receipts fading I found that stapling them to a sheet of A4 and then keeping them in a dark folder, stored in a dark, cool place, stops them fading at all. HMRC won’t accept photocopies or scanned copies of receipts, they will only accept originals, and are quite hard over on this. I had two low value receipts that were faded a bit and had a comment from them that they were only just acceptable, due to poor legibility.

  3. I am about to start collating my VAT receipts and would find it very useful if you could send me a copy of your spreadsheet of the VAT reclaim form.
    Many thanks.

    1. Hi Wendy,

      No problem at all. It’s pretty much a copy of the HMRC form, replicated in Excel, with multiple pages that carry over the sub-total from one page to the next. There are two separate sections, one with pages for receipts where the VAT is shown separately and one for things like till receipts where the VAT is often not broken out but included in the total.

      I’ll clean out the data from mine, make a copy of the blank spreadsheet and upload it to this website later today. It should then appear as a download link at the top, so anyone can use it.

      Jeremy

      Edited to add:

      I’ve uploaded a blank form 431 as an Excel spreadsheet, that should be formatted with the print areas set to print A4 pages that are a close match to the original. I added a serial number column on the left, as I found it easier to pencil a serial number on each receipt, it made collating them in order easier (not essential for HMRC, but I took the view that anything that made their task easier was worth doing!).

      The spreadsheet also includes several extra copies of page 5 of the form, labelled 5a, 5b etc, as I found there weren’t anywhere near enough on the official form. Page 6 is the one for till receipts etc. You should only need to fill your name in on the first page and it should automatically copy over to all the other pages. The same with the sub-totals, they copy over from the bottom of each page to the top of the next, so there is always a correct running total at the bottom of the page you are currently using.

      I’ve tested the download and it seems to work OK, any problems just post here and I’ll try and help.

  4. Hi Jeremy,

    Thank you very much for making your spreadsheet available so quickly. It makes sense to use something that is already tried and tested rather than reinventing the wheel.

    I’m not relishing the task of completing the VAT return. I have filed all our receipts as we’ve gone along so they are all at least in one place and in date order. I’m hoping that once I get ‘in the zone’ it will get easier. We are not ready to be signed off yet but if I can get the VAT paperwork in order before this happens it would help.

    Thanks again, Wendy.

  5. Hi Wendy,

    Glad you managed to download it OK. You did me a favour, too, because I’d upgraded the software this blog runs on (WordPress) and hadn’t realised that the upgraded version has a bug, that prevents the upload of a whole stack of file types, including .xls files!

    I bodged a way around the problem by FTP’ing the file up to the server, in the correct folder, then manually editing the link to make it work.

    I’ve spent a happy hour trying to find out why certain file types won’t upload, when I know they used to, have learned a fair bit more about how this web stuff works and fixed the bug as well. As that file isn’t registered on the database that WordPress uses to keep track of things, I will have to take it down and reload it at some point, but I’ll wait for a time when there aren’t too many visitors around, to cause the least disruption.

    Jeremy

    PS: If the above is largely gobbledegook, then sorry, all I can say in my defence is that it would have been to me until I decided to put this blog up on our own webspace, rather than leave it hosted on a forum!

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