I often get asked, especially when carrying out works on listed buildings, in what circumstances can the works be zero rated for VAT? As a VAT-registered building contractor we have to charge VAT on all works carried out EXCEPT for several important exceptions.

So, where we do NOT have to charge VAT or can the rate be reduced? Generally speaking, a reduced rate or zero rate can be applied if certain conditions are met when carrying out building conservation works.


Alteration works carried out to historic buildings can also be eligible for the zero rate of VAT if all the following conditions are met:

  • The building must be listed (that is to say, included in a statutory list of buildings of special architectural or historic interest: unlisted buildings in conservation areas or buildings included in a local authority’s non-statutory list of buildings of local interest are not listed buildings)
  • The building must be a residential building or a ‘charitable’ building, for instance used by a charity solely for non-business purposes and/or as a village hall
  • The building must be altered by the works and a meaningful change has been made to the fabric of the building
  • The works must not be for repair or maintenance purposes
  • Listed building consent must have been both required and granted for the works.

On the final point, it should be noted that many listed places of worship are not subject to the usual controls over listed buildings. These exceptions are subject instead to controls administered by their respective churches under ‘ecclesiastical exemptions’.

Where the building concerned is a communal residential or ‘charitable’ building, zero-rating is conditional upon the client providing a certificate to the contractor attesting that the client will be using the building solely as a communal residential or ‘charitable’ building. Sub-contractors, working to a contractor or another sub-contractor cannot zero-rate their supplies.


Repair or maintenance works are liable to VAT at the standard rate but if they form part of a conversion or renovation as described below, they can be reduced or zero-rated accordingly.


Opening/closing doorways or window apertures
Replacement of a flat roof with a pitched roof
Damp proofing
Extending wiring and plumbing systems
Floodlighting (when installed on a building)
Replacement of uPVC windows with wooden windows for aesthetic reasons
Replacement of rotten windows with uPVC double glazing
Re-felt and batten roof
Replacement of a straw thatch with reeds and changes to ridge detail



VAT incurred on works of repair or maintenance by congregations or other parties responsible for the upkeep of listed places of worship can reclaim that VAT through a grant refund scheme operated by the Department of Culture, Media and Sport.


Certain types of residential conversion work are eligible for the reduced rate of VAT (five per cent), regardless of whether the building is historic or not. These include conversions from one type of residential use to another, such as from a house to flats and vice versa, and conversions from non-residential use, such as from a shop to a house.

Under certain conditions, conversion work can be eligible for the zero rate of VAT. This can be the case where the client is a registered social landlord or housing association, and the conversion is from a non-residential use. Zero rating can also apply to a non-residential conversion for a registered social landlord when a residential building that has been unoccupied for at least ten years is brought back into habitation.

Where the building concerned is to become a communal residential building, reduced-rating or zero-rating is conditional upon the client providing a certificate to the contractor, proving the client will be using the building solely as a communal residential building. (The certificates can be found in section 18 of HMRC’s Public Notice 708 – see ‘Recommended Reading’, below.) Sub-contractors working to a contractor or another sub-contractor cannot reduce-rate or zero-rate their supplies.


Building and construction work is usually VAT standard-rated but some alterations you make to a disabled person’s home may qualify for zero-rating.  The rules are quite complicated and depends on the type of works being undertaken and who is paying for them.  For example, the adaption of a normal bathroom to a disabled shower room would be zero rated if being paid for directly by the disabled person but would be VAT standard rated if being carried out for a Local Authority!  To see the full extent of the rules then go to http://www.hmrc.gov.uk/vat/sectors/builders/disabled.htm


Under certain conditions, renovation or alteration work carried out to a residential building is eligible for the reduced rate (five per cent), regardless of whether or not the building is historic. One of those conditions is that the building must have been empty for at least three years before the works begin.

Where the building is a communal residential building, reduced-rating is conditional upon the client providing a certificate to the contractor attesting that the building will be used as a communal residential building. Sub-contractors, working to a contractor or another sub-contractor, cannot reduce-rate their supplies.


If the works fall into more than one category and more than one rate of VAT applies to different aspects of the job, the lowest rate takes precedent. For example, if alterations are being made to a listed residential building as part of the conversion into another type of residential building, VAT will be applied at zero per cent rather than at five per cent.

Please be aware that the above is my interpretation of the VAT rules and that full clarification should be obtained from HMRC – see below for contact details


A further useful resource outlining how VAT applies to building conservation work is HMRC’s Public Notice 708: VAT – Buildings and construction. Copies can be accessed by calling 0845 010 9000 or visiting www.hmrc.gov.uk The helpline can also provide further advice if necessary.

Information on the Listed Places of Worship Grant Scheme can be obtained by calling 0845 601 5945 or visiting www.lpwscheme.org.uk.


In memory of George Waller, who died just before Christmas, ‘The George’s Cup’ has been established for winners of company events.

George was Bill Waller’s brother and previously worked for Waller Associates Ltd.

The first proud recipient of the cup is Mr Colin Holland – who scored a magnificent 202 at the Christmas bowling event.


Colin is pictured above receiving his cup from Steve Waller at the Subcontractors Meeting which took place on Thursday 6th January 2011.


September and October has been a couple of very busy months with Waller Associates Ltd establishing three trading divisions:

Waller Building Services, Waller Services and Waller Glazing Services

We have had all our vans designed with the new logos, and revised all our company policies and stationery accordingly.

In addition to this we have had an increase in workload and client demands.  Whilst we welcome the increase we would also like to thank all our staff and sub-contractors for all their efforts in not only meeting these requirements but in many cases exceeding customer requirements and receiving some brilliant customer feedback.


Waller Glazing Services is now fully operational with a full range of glass in stock ranging from picture frame glass to laminated safety glass, fire rated glass clear and wired.

We are able to repair all types of windows ranging from caravan windows to shop fronts, leaded light restoration and ‘insitu’ repairs on site

We supply and fix mirrors and splash backs

Provision of 24 hour boarding service

All glass cut to size and delivered

UPVC windows supplied/fitted with free quotations (no salesmen!)