A recent decision by the VAT tribunal means that the VAT: DIY Housebuilders and Converters VAT Refund Scheme applies to holiday homes.

The change represents a windfall for some lucky holiday home owners and comes as a consequence of the decision in Mrs Irene Susan Jennings [TC00362].

HM Revenue & Customs (HMRC) now concedes that an Input VAT repayment claim is possible where VAT is incurred on the cost of building materials and certain services incurred by an individual in constructing a holiday home or converting a non-residential building into a holiday home.

The decision will apply to works completed in the past four years and three months, and puts holiday home owners on equal footing to DIY housebuilders and converters.


The DIY Housebuilders and Converters scheme was first introduced in 1974. It allows refunds of VAT incurred on the cost of building materials and (where appropriate) on conversion services for private individuals. The scheme ensures that self-builders are not put at a disadvantage when compared with individuals who purchase a new build or conversion from a developer and receive those supplies zero-rated for VAT purposes.

HMRC never in the past applied the DIY Housebuilders Scheme to holiday homes since their supply by a developer attracts VAT at the standard rate. However, the recent decision of the VAT Tribunal reverses this view.

How to claim

A claim is possible if a certificate of completion was issued within the last four years and three months from 15 June 2010.  All claim forms should be accompanied by:

  • planning permission
  • certificate of completion
  • building plans
  • all original VAT invoices, bills and credit notes

Claim forms are attached to the following forms:

  • VAT 431NB: VAT refunds for DIY housebuilders (new houses)
  • VAT431C: VAT refunds for DIY housebuilders (conversions)

Source:  Revenue & Customs Brief 29/10

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