Following the Grenfell fire tragedy and the subsequent investigations into the cause, exterior cladding was found to have been responsible for enabling the fire to spread between floors. As a consequence, owners of buildings with similar cladding have been undergoing an extensive programme of removal and or replacement. In so doing, they have incurred VAT, generally at 20% on the replacement cost. For many such landlords, this VAT has been treated as an irrecoverable capital cost.
HMRC have recently confirmed to the JVCC property group, that where the replacement works are instructed by the original developer, they may, by concession be treated as remedial works to the original construction and so may be zero rated for VAT.
- Where you have instructed these remedial works and have person constructing status, a VAT reclaim is possible.
- Where you do not have person constructing status, it may still be possible for the works to be brought within the 5% VAT rate, thereby again achieving a significant saving.
4 Eyes Ltd has extensive experience in quantifying and negotiating this type of VAT reclaim and would be delighted to act on your behalf.