VAT on new conservatories & home extensions

Some UK householders seem to be under the miss-conception that home extensions and new conservatories don’t attract Valued Added Tax. The simple fact is that the vast majority of conservatories built do attract 20% VAT, although there are a few exceptions if the conservatory is built at the same time as a new dwelling.

The bottom line is that if a home owner is adding an extension to their home or a double glazed conservatory to an existing house, then such a structure attracts VAT at the standard rate of 20%. Even if a property homeowner wishes to build a separate detached dwelling on the same land as their own home for friends or relatives, Valued Added Tax is still payable at the standard rate. New homes for family members etc. are only zero rated if they are on land that is not linked to the home owners premises. For a new conservatory in the UK to qualify for zero rated VAT it needs to fall into one of the 3 categories below:

a) A new conservatory is built at the same time as a new dwelling

b) If the new conservatory is shown on the approved plans of a new dwelling and is constructed immediately following the construction of a new dwelling

c) The new conservatory is not on the approved plans of a new dwelling, and its size and construction means it does not require planning and is built during or immediately after the construction of a new dwelling

The key word in the cases of b) and c) is “immediately” as if work is not commenced immediately (and finished to conclusion without a break) after the new dwelling is constructed, then the conservatory structure or extension will be treated as standard VAT rated, even if the work is all carried out prior to occupation. In cases where only the footings of a conservatory or extension are constructed prior to the completion of a building, then only the footings can be treated as zero rated. In times past, UK property owners were able to claim zero rated Value Added Tax on conservatories that were added on to a completed new dwelling prior to their occupation, but this is no longer the case unless the conservatory is built at the same time as the new dwelling or immediately after it has been built.

Please note that the erection of a new double glazed orangery or conservatory may not require planning permission, so might not have appeared on the original approved plans, plus the decision to build a new conservatory might not have be made until after construction on a new dwelling had already commenced. Modern double glazed structures nowadays can be designed and built on proper foundations far quicker than houses take to construct, plus sometimes these glass extensions don’t need Building Regulatory Approval, depending on their size and construction etc.

Existing UK property owners hoping to avoid paying Value Added Tax on a new double glazed conservatory, orangery or extension of glass are therefore sadly not legally able to do so. The sensible thing to do when budgeting for a new extension or conservatory is to add 20% VAT to the budget, as legitimate law abiding double glazed conservatory suppliers and installers are legally obligated to collect VAT at 20% and hand it all over to HMRC. For free expert conservatory design help and advice it is best to contact established independent conservatory double glazing manufacturers and installers for a no obligation consultation.