VCONST10350 - Zero-rating major interest grants in substantially reconstructed 바카라 사이트˜protected buildings바카라 사이트™: what 바카라 사이트˜substantially reconstructed바카라 사이트™ means: stage 2(b) - the 60 per cent test

This test requires that 60 per cent of the cost of the job is work that would qualify for zero-rating as supplies in the course of an 바카라 사이트˜approved alteration바카라 사이트™ if carried out by a VAT registered contractor (VCONST08000).

The person making the grant doesn바카라 사이트™t have to employ a VAT registered contractor. He can buy the goods and do the work himself.

The important point is that 60 per cent of the cost of the reconstruction is of a nature that would qualify as zero-rated as supplies in the course of 바카라 사이트˜approved alterations바카라 사이트™ if carried out by a VAT registered contractor.

The following formula should be used to work out whether the 60 per cent test has been met:

the cost of the approved alterations (excluding professional fees) divided by the total cost of the reconstruction (excluding professional fees) multiplied by 100

Remember:

  • the costs are all net of VAT
  • the cost of services provided by an architect, surveyor or other person acting as a consultant or in a supervisory capacity are excluded from the calculation
  • costs that don바카라 사이트™t relate to the reconstruction are excluded from the calculation
  • 바카라 사이트˜in house바카라 사이트™ labour costs are included in the total cost of the reconstruction (and the cost of the approved alterations if they are services in the course of an 바카라 사이트˜approved alteration바카라 사이트™)
  • in addition to the alterations proper, services and materials supplied in the course of an alteration are included in the cost of the approved alterations.(VCONST09600)
  • materials are included in the total cost of the reconstruction (and the cost of the approved alterations if they are used in the course of what would be a zero-rated 바카라 사이트˜approved alteration바카라 사이트™).

The onus of proving entitlement rests with the trader. You should ensure that:

  • the trader demonstrates what costs have been used to make up the cost of the approved alterations. You should take care in accepting calculations where the cost of the approved alterations is derived by deducting from the total cost items that are always standard-rated - this is because if an insufficient number of items have been deducted the final percentage would be inflated
  • all relevant costs have been included in the total cost of the reconstruction - if the costs are too low then the final percentage would be inflated.