UPDATE: HMRC has amended the rules in relation to the Scheme, effective on 5 December 2023 and new guidance has been issued, which can be viewed on HMRC’s website. The updated rules extend the time limits for making a claim in respect of buildings completed on or after 5 December 2023 and also allow for claims to be submitted online.
In the case of Andrew Ellis and Jane Bromley, 2 DIY housebuilders claims were submitted to HMRC. HMRC repaid the first claim having accepted valuation for council tax purposes as evidence of completion. HMRC received a further claim following the grant of planning permission by the Local Planning Authority for further required works. The second claim was rejected as it was out of time and as a valid claim had already been made and paid.
The court found that the first claim was paid in error as the evidence of completion given by the Valuation Office was invalid and should not have been accepted. As the first claim was paid in error the second claim should have been allowed and was not outside the 3 month time limit. We covered this case in a VAT Focus on 8 October 2021 and at that time HMRC had made no comment on the case. As this case was only heard at the First Tier Tribunal it could not be relied on by anyone other than the Appellants.
HMRC has now issued a Revenue and Customs Brief 08 (2022) dated 13 May 2022 in which it confirms that HMRC policy remains that only a single claim is allowed under the DIY Scheme. However, the Brief goes on to say that where it is agreed that a claim has been repaid in error, HMRC will accept a subsequent claim with evidence that the claim has been made within 3 months of completion.
HMRC already allow (on a case by case basis) acceptance of supplementary claims. This is for invoices and works carried out before the claim was submitted, which may have been left out in error or invoices issued late by the contractor.
It appears that HMRC do not see the case as a basis for allowing multiple claims for a single DIY project and therefore the recommended approach remains to be the submission of a single claim covering a full build, submitted within 3 months of completion. Where there is any difficulty in meeting this deadline; where a property is occupied prior to completion or where there is any other uncertainty over time limits we would be happy to advise. Please call or email Helen Carey or your usual Constable VAT contact to discuss.