Insulation: Repairs and Maintenance
The question
To ask the Chancellor of the Exchequer, for what reason HMRC levies VAT on cladding repairs by social housing providers without counting them as costs of completing the original building work.
Answered by Dan Tomlinson
The building of new homes can be zero-rated for VAT if the work is part of the original construction. However, once building works are completed, later work, such as repairs or replacing cladding, is usually subject to standard-rate VAT, as it is treated as maintenance rather than part of the original build.
Social housing providers may be able to recover some or all of this VAT, depending on their specific VAT position.
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