VAT savings

For most construction work on a residential property, VAT is charged at the standard rate of 20%.

In some instances, there are exemptions. If you are renovating an empty house or flat that has been empty and unoccupied for two years or more - and you use a VAT-registered contractor - you could be eligible for a reduced rate of 5% VAT for those cost of works.

This is a potential significant reduction for the cost of your home repairs.

Full details can be found via the government's guidance on Buildings and construction (VAT Notice 708) - specifically section eight of the guidance ('Reduced rating the renovation or alteration of empty residential premises').

Your contractor will need to show HM Revenue & Customs evidence that the property has been empty for two years. Babergh and Mid Suffolk District Councils can provide the liable Council Tax holder with a letter that confirms this information.