# VAT Routing Guide

This guide explains the `claimantRoute` vocabulary used by the VATBuild API, what each route means for VAT treatment, and how classification outcomes map to actions.

## Claimant routes

The `claimantRoute` field tells the engine which UK VAT scheme applies to a project. It is required in `POST /api/v1/check-line-item` (`context.claimantRoute`) and `POST /api/v1/projects` (`claimantRoute`).

| `claimantRoute` | Scheme | VAT treatment |
|---|---|---|
| `self_build_431nb` | HMRC VAT431NB (new build) | Qualifying contractor **services** are zero-rated (0%). Self-purchased **materials** are standard-rated (20%) and reclaimable via the 431NB form after completion. |
| `self_build_431c` | HMRC VAT431C (qualifying conversion) | Contractor **services** are reduced-rated (5%) and fully reclaimable via the 431C form. |
| `self_build_standard` | No relief scheme | Standard renovation or extension — 20% VAT throughout. Nothing is reclaimable via a 431 form. |
| `self_build_reduced` | Reduced-rate-at-source only | Empty dwelling scheme (2+ years unoccupied) — 5% applied at source on contractor services. Not a refund scheme; no 431 form. |
| `developer` | Input-tax recovery | Developer recovers VAT via periodic VAT returns, not a 431 form. |
| `contractor` | Input-tax recovery | Contractor recovers input tax via periodic VAT returns. |

The full route configuration (labels, checklist keys, allowed outcome values) is available from the public reference endpoint:

```
GET /api/v1/reference/routes
```

## Classification outcomes (`claimRoute`)

The classification engine (`check_line_item`, `route_line_item`) returns one of the following ten `claimRoute` values. Machine clients should branch on this field — values are stable within `/api/v1/`.

| `claimRoute` | Meaning | Action for claimant |
|---|---|---|
| `hmrc_refund` | Reclaimable via HMRC 431NB or 431C form | Include in the 431 form claim |
| `zero_at_source` | VAT correctly charged at 0% — nothing to reclaim | No action needed; contractor billed correctly |
| `reduced_at_source` | VAT correctly charged at 5% — no refund | No action needed; reduced rate applied at source |
| `input_tax` | Recoverable via VAT return (developer/contractor) | Include on periodic VAT return |
| `supplier_correction` | Supplier charged wrong VAT rate | Request corrected invoice from supplier |
| `undercharged_vat` | Supplier undercharged VAT (liability risk) | Notify supplier; do not claim until corrected |
| `not_reclaimable` | VAT is blocked or not recoverable | Do not include in any claim |
| `input_tax_blocked` | Input tax explicitly blocked (e.g. private use) | Not recoverable; excluded from claim |
| `pending` | Insufficient context to classify | Provide additional context (supplyType, identifierName) |
| `pending_complex_answer` | Complex-VAT question awaiting confirmation | Present the confirmation question to the user or agent |

### Stored-only routes

The following five values are assigned by the scope/work-package pipeline and are never returned by `check_line_item` or `route_line_item`. They may appear on items retrieved via `list_line_items`.

| `claimRoute` | Meaning |
|---|---|
| `full_hmrc_refund` | Fully reclaimable via HMRC form (100%) — scope pipeline only |
| `esm_zero_rate` | Energy-saving materials — zero-rated (ESM scheme) — scope pipeline only |
| `split_required` | Mixed supply — needs apportionment — scope pipeline only |
| `reverse_charge_cis` | Domestic reverse charge applies — scope pipeline only |
| `outside_scope` | Supply is outside the scope of UK VAT — scope pipeline only |

## VAT treatment by route

### `self_build_431nb` — New Build

Qualifying **services** (labour, subcontractor work, supply-and-install):
- Correct rate: **0%**
- If charged 20%: `claimRoute = "supplier_correction"` — request a corrected invoice
- If charged 0%: `claimRoute = "zero_at_source"` — no action

Self-purchased **materials** (materials, professional services):
- Correct rate: **20%**
- `claimRoute = "hmrc_refund"` — include in the VAT431NB form after practical completion

### `self_build_431c` — Qualifying Conversion

Qualifying **services**:
- Correct rate: **5%** (this is correct — do not flag 5% as an error for 431C)
- If charged 5%: `claimRoute = "hmrc_refund"` — fully reclaimable via VAT431C
- If charged 20%: `claimRoute = "supplier_correction"` — request corrected invoice at 5%
- If charged 0%: `claimRoute = "supplier_correction"` — undercharge; 5% is correct

**Materials** bought directly (not via contractor):
- `claimRoute = "hmrc_refund"` at 20%

### `self_build_standard` — Standard Renovation

No relief scheme applies. VAT at 20% is the correct rate throughout. `claimRoute = "not_reclaimable"` for services and materials (there is no 431 form claim available).

### `self_build_reduced` — Reduced Rate at Source

5% is applied at source by the contractor. There is no refund — this is `claimRoute = "reduced_at_source"`. Nothing to reclaim.

### `developer` / `contractor` — Input Tax Recovery

VAT is recovered via the developer's or contractor's periodic VAT return, not a 431 form. Reclaimable items return `claimRoute = "input_tax"`. Blocked items (private use, entertainment) return `claimRoute = "input_tax_blocked"`.

## Complex-VAT types

Some line items require additional context before they can be definitively classified. These are flagged with a `vatComplexTypeHint` and return `claimRoute = "pending_complex_answer"` until a confirmation answer is provided.

| `vatComplexTypeHint` | What the question determines |
|---|---|
| `esm_install` | Is this a qualifying energy-saving materials installation? (zero-rated if yes) |
| `supply_and_install` | Is this a supply-and-install or supply-only? (affects whether labour or materials rules apply) |
| `scaffolding` | Is scaffolding supplied independently or as part of qualifying construction? |
| `fitted_furniture` | Does the supply qualify as an incorporated building material under Notice 708 §13.5? Two paths: (a) fitted kitchen supplied AND installed by the same contractor, or (b) a basic fitted wardrobe (wall-to-wall, hanging rail/shelf only — no drawers or fittings). See [Qualifying fitted furniture](#qualifying-fitted-furniture) for the full conditions. |
| `soft_landscaping` | Ornamental planting, trees, hedging — qualifying only if required by a planning condition. Topsoil, grass seeding and plain turfing within the site curtilage are auto-qualifying and do not use this hint. |
| `garage_outbuilding` | Garage/outbuilding — qualifying only if integral to the dwelling |

Provide `confirmedAnswer: true` or `confirmedAnswer: false` (or a three-way string answer for `supply_and_install`) to resolve the outcome.

## HMRC-excluded categories

Some categories are permanently blocked from reclaim under any route — no confirmation question is asked and no `vatComplexTypeHint` is required. The classifier detects these from the line text alone and returns `claimRoute = "not_reclaimable"` immediately with a specific `rule.explanation` citing the HMRC basis.

| Category | HMRC basis | Note |
|---|---|---|
| Domestic appliances / white goods (fridges, freezers, washing machines, ovens, hobs, range cookers, dishwashers, tumble dryers) | Notice 708 §§13.6, 13.9 | Boilers, heat pumps, and other heating appliances are qualifying items under Notice 708 and are not blocked |
| Outdoor leisure facilities (swimming pools, hot tubs, jacuzzis, tennis courts) | Notice 708 §3.3.5 | Indoor pools forming part of the dwelling fabric are not blocked |
| Garden water features and ornamental ponds (ornamental ponds, wildlife ponds, garden ponds, water features, garden fountains, decorative fountains) | Notice 708 §3.3.5 | No carve-out — decorative garden water elements are not qualifying construction works |
| Electrically operated / motorised blinds and shutters | HMRC DIY disallowable list (March 2025) | Manual non-motorised blinds remain reclaimable |
| Purchased plant, tools, and equipment (cement mixers, power tools, wheelbarrows) | HMRC DIY disallowable list | Plant hired with an operator follows the `plant_hire` vatComplexType path |
| Demolition or site investigation before planning permission was granted | Notice 708 §3.3.6 | Post-planning demolition is zero-rated on 431NB |
| Soft furnishings (curtains, drapes) and garden items (outdoor furniture, gazebos, pergolas, summer houses) | HMRC DIY disallowable list; Notice 708 §3.3.5 | Curtain poles/tracks follow the `fitted_furniture` path; integral outbuildings follow the `garage_outbuilding` path |
| Freestanding furniture (sofas, armchairs, chests of drawers, sideboards, bookcases, freestanding wardrobes/cabinets/dressers) | HMRC DIY disallowable goods list; HMRC Notice 431NB | Fitted furniture installed by the same contractor follows the `fitted_furniture` vatComplexType question; freestanding baths and plumbing fixtures are not affected |
| Electric gate motor / automated gate components (motors, actuators, remote controls, intercoms) | HMRC DIY disallowable goods list | Manual or pedestrian gates without powered components remain reclaimable as boundary works |
| Separately invoiced transport / haulage (standalone haulage charges, freight, carriage charges) | HMRC DIY disallowable goods list | Delivery included on the same line as qualifying materials (e.g. bricks with delivery) remains qualifying |
| Broadband / telecoms connection (broadband installation, fibre, internet connection) | HMRC DIY disallowable goods list | First-time electricity, gas, and mains water connections are qualifying utility connections |
| CCTV and video surveillance (cameras, NVR/DVR recorders, IP cameras, camera systems) | Notice 708 §13.9 | Fire alarms, smoke alarms, CO detectors, intruder-alarm panels, and alarm bells are qualifying safety equipment |
| Artificial grass / astroturf / synthetic turf | HMRC DIY scheme disallowable goods list | Natural turf, topsoil, and grass seeding are qualifying landscaping works and remain reclaimable |
| Greenhouse / glasshouse (including permanently fixed structures) | HMRC DIY scheme disallowable goods list | No carve-out for fixed installation — the greenhouse exclusion applies regardless |
| Temporary / portable site lighting (lighting towers, temporary site lights, portable lighting rigs) | HMRC DIY scheme disallowable goods list | Permanent exterior or garden lighting installed as part of the finished dwelling remains reclaimable |
| Temporary / portable site heating equipment (freestanding fan heaters, portable site heaters, construction-site heaters) | HMRC DIY scheme disallowable goods list; Notice 708 §3.1 | Permanent heating appliances — boilers, heat pumps, underfloor heating, central heating systems — remain reclaimable |
| Post-completion maintenance and servicing (annual boiler service, annual heating maintenance, service contracts, service agreements, work after completion) | Notice 708 §3.3.2 | Construction-phase installation, commissioning, and snagging with no post-completion signal — not caught by this rule |
| Replacement / separately supplied light bulbs (LED bulbs, halogen bulbs, fluorescent tubes, replacement lamps, spare bulbs) | HMRC DIY scheme disallowable goods list | Complete light fittings and permanently installed luminaires remain reclaimable |
| TV aerials, satellite dishes, and aerial amplifiers (TV aerials, TV masts, aerial masts, aerial amplifiers, satellite dishes, freeview aerials, sky dishes) | **Not blocked** — HMRC Notice 708 §13.8.1 explicitly lists these as qualifying incorporated building materials. They route as standard-rated materials (20% VAT → hmrc_refund on 431NB/431C). Permanent aerial cabling (first-fix wiring inside walls to TV sockets) also qualifies. | Notice 708 §13.8.1 |
| Television sets / TV sets (televisions, flat-screen televisions, wall-mounted televisions, smart TVs) | HMRC DIY scheme disallowable goods list; Notice 708 §13.6 | TV back boxes, TV sockets, TV cable points, TV cabling, and first-fix AV infrastructure — permanent building materials that remain reclaimable; TV units and cabinets are assessed via the fitted-furniture question; wall-mounting brackets are separately blocked |
| Extension leads / temporary site distribution equipment (extension leads, temporary distribution boards, gang sockets) | HMRC DIY scheme disallowable goods list | Permanent consumer units, distribution boards, and fixed electrical installations remain reclaimable |
| Temporary generator / genset hire (diesel generators, gensets, mobile generators, site generators, temporary power generators hired during construction) | HMRC DIY scheme disallowable goods list; Notice 708 §3.1 | Permanently installed standby generators forming part of the completed building remain reclaimable |
| Skip hire / waste skip (skip hire, waste skip hire, mini skip hire, roll-on roll-off skip, grab lorry hire, skip collection) | HMRC DIY scheme disallowable goods list | General site clearance or licensed waste disposal services described without skip hire language remain reclaimable |
| Portable / site toilet hire (portable toilet hire, portaloo hire, site toilet hire, chemical toilet hire — temporary welfare facilities) | HMRC DIY scheme disallowable goods list | Permanent sanitary fixtures incorporated into the finished dwelling remain reclaimable |
| Scaffolding equipment hire only (bare hire of scaffolding tubes, boards, fittings, and clips without erection or dismantling labour) | Notice 708 §3.4.2 / VCONST02750 | Scaffolding erection and dismantling labour follows the main project rate and is not blocked; combined erection + hire descriptions continue to the scaffold split assessment |
| Temporary site-fencing hire (Heras panels, Heras panel hire, fencing hire, barrier hire, crowd-control barriers, hoarding hire, and similar hired temporary site boundary fencing) | HMRC DIY scheme disallowable goods list; Notice 708 §3.4.2 | Permanent boundary fencing erected as a qualifying construction service without hire or rental language remains reclaimable |
| Consumable heating fuel (heating oil, central heating oil, fuel oil, kerosene, gas oil, oil for commissioning — consumable fuels consumed in use during construction) | HMRC DIY scheme disallowable goods list; Notice 708 §13 | Oil-fired boilers and permanently installed oil-heating appliances — qualifying heating plant under Notice 708 §13.6 — remain reclaimable |
| EV charging appliance / wallbox (supply and installation of the chargepoint unit — wallbox, EVSE unit, EV charging unit) | Notice 708 §§13.2 and 13.6 (policy-pending VAT-specialist sign-off) | Dedicated fixed cabling, circuit, trunking, conduit, and isolator are not blocked — they may qualify as part of qualifying first-fix electrical works |
| EV charger — split invoice required (invoice line naming both the appliance/wallbox and dedicated fixed infrastructure together) | Notice 708 §§13.2 and 13.6 (policy-pending VAT-specialist sign-off) | Descriptions covering only dedicated cabling, circuit, or isolator (no appliance/unit noun) route as potentially qualifying infrastructure |
| Domestic battery storage / inverter (home battery storage systems, energy storage systems, solar battery systems, battery inverters, solar inverters, off-grid inverters) | HMRC DIY scheme disallowable goods list; Notice 708 §13.6 | Inverter heat pumps, heat pump inverters, and inverter boilers — permanent heating plant — remain reclaimable |
| Barbed wire / razor wire (barbed wire fencing, razor wire, barbed tape, razor coil) | HMRC DIY scheme disallowable goods list; Notice 708 §13 | Qualifying boundary fencing works on the same line must be reissued as a separate line to recover their portion |
| Retractable awnings (awnings, patio awnings, motorised awnings, electric awnings, retractable canopies) | HMRC DIY scheme disallowable goods list; Notice 708 §13 | Fixed and permanent canopies built into the structure are not matched by this rule and remain reclaimable |
| Wall-mounting bracket / display mount (wall mounting brackets, wall mounting arms, monitor arms, monitor mounts, display mounts, screen mounts) | HMRC DIY scheme disallowable goods list; Notice 708 §13.6 | Radiator and towel-rail wall-mounting brackets remain reclaimable; structural brackets (joist hangers, beam brackets, shelf brackets, curtain-rail brackets) are not matched by this rule |
| Security / driveway bollards (security bollards, driveway bollards, parking bollards, retractable bollards) | HMRC DIY scheme disallowable goods list; Notice 708 §13 | Qualifying driveway or hard-landscaping works on the same line must be reissued as a separate line |
| Water system commissioning / pipe chlorination (water commissioning, pipe chlorination, legionella testing, water sampling, pipe sampling, pipe flushing) | Notice 708 §3.3.2; Water Supply (Water Fittings) Regulations 1999 | Qualifying plumbing installation works (first-fix pipework, second-fix plumbing) remain reclaimable and must be reissued as a separate line |
| Reusable / portable tools and tool storage (cordless drills, cordless screwdrivers, impact drivers, cordless saws, drill bits, saw blades, toolboxes, tool chests, tool bags, tool belts, tool kits) | HMRC DIY scheme disallowable goods list; Notice 708 §13 | Hired plant and equipment (including plant hired with an operator) are handled via the plant_hire vatComplexType route and are not blocked; purchased cement mixers and wheelbarrows are a separately blocked category (see the "Purchased plant, tools, and equipment" row above) |
| Removable consumer electronics (wireless routers, Wi-Fi routers, Wi-Fi access points, mesh Wi-Fi systems, streaming receivers, streaming sticks, streaming media players, set-top boxes) | HMRC DIY scheme disallowable goods list; Notice 708 §13.6 | First-fix data cabling, ethernet outlets, data points, and wired network infrastructure installed as part of the building fabric remain reclaimable; television sets are separately blocked; wall-mounting brackets are separately blocked |

When a blocked item appears on the same line as qualifying works, the entire combined line is blocked. The `rule.explanation` in the response will instruct the supplier to reissue separate lines. See [mcp-tool-reference.md](mcp-tool-reference.md) for the full per-category details and `firedRuleId` values.
## `firedRuleId` — which rule fired?

Every classification response includes a `firedRuleId` string (e.g. `rule_4a7f3c8e2b916d05`). This is a stable opaque token — the same rule always returns the same value across requests. The `rule.label`, `rule.noticeRef`, and `rule.explanation` fields translate this into human-readable form suitable for displaying to end users or auditors.

Compare `firedRuleId` for equality against a previously-observed token when you need to detect a specific outcome programmatically. Do not parse, pattern-match, or branch on the token's internal structure — it is intentionally opaque and the format may change between major API versions.

## Example: classifying a line item

```json
POST /api/v1/check-line-item

{
  "context": {
    "claimantRoute": "self_build_431c",
    "buildingType": "barn conversion",
    "newDwelling": "yes"
  },
  "item": {
    "lineText": "Structural steelwork",
    "netAmount": "12000.00",
    "vatCharged": "600.00",
    "supplyType": "subcontractor",
    "identifierName": "Structural works"
  }
}
```

Response:

```json
{
  "ok": true,
  "data": {
    "outcome": {
      "claimRoute": "hmrc_refund",
      ...
    },
    "reclaimAmount": "600.00",
    "firedRuleId": "rule_9c2e5a1f7b843d0e",
    "rule": {
      "label": "431C conversion — correct 5% service charge",
      "noticeRef": "Notice 708 s3.3",
      "explanation": "Contractor services on a qualifying 431C conversion are correctly charged at 5% and are fully reclaimable via the VAT431C scheme."
    }
  }
}
```

The 5% charge (£600 on £12,000 net) is correct for a 431C conversion. Include the £600 in the VAT431C claim.

## Supply types

The `supplyType` field tells the engine the nature of the supply. Providing it significantly improves classification accuracy.

| `supplyType` | Description |
|---|---|
| `labour` | Labour-only service (no materials supplied) |
| `subcontractor` | Subcontractor services (treated as services for 431NB/431C) |
| `materials` | Materials purchased directly by the self-builder |
| `supply_and_install` | Combined supply and installation (complex — may trigger vatComplexTypeHint) |
| `installation_service` | Installation service only (no materials component) |
| `professional_services` | Architect, surveyor, structural engineer fees |

## Qualifying fitted furniture

*HMRC Notice 708 §13.5*

Two types of fitted furniture may qualify for zero/reduced-rate relief as incorporated building materials:

### Fitted kitchens

A fitted kitchen qualifies when it is **both supplied and installed by the same contractor** (or subcontractor) carrying out the construction. Supply-only kitchen units — purchased separately without installation by the same party — are standard-rated at 20% and are not reclaimable.

### Basic fitted wardrobes

A basic fitted wardrobe qualifies as an incorporated building material when it consists **only** of:

- A **wall-to-wall unit**, or a unit that fits entirely into a recess
- A **hanging rail or shelf** for hanging clothes
- **Shelves**

A basic wardrobe does **not** include: drawers, pull-out trays, shoe racks, mirrors, or decorative panelling. A wardrobe with any of these features is furniture under HMRC rules — not a building material — regardless of who installs it.

The same-contractor installation requirement that applies to fitted kitchens does **not** apply to basic wardrobes. A basic wardrobe qualifies on its structural description alone.

### What does not qualify

- Free-standing wardrobes, dressers, or other bedroom furniture
- Modular wardrobe systems with carcasses, drawer packs, or internal fittings
- Bathroom vanity units and fitted bathroom cabinets (separate product category)
- Supply-only kitchen units (no same-contractor installation)
- Kitchen units where the units and installation are separately invoiced by different parties

### Agent guidance

When classifying a `fitted_furniture` item, ask the user:

> *"Is this either (a) a fitted kitchen that was both supplied and installed by the same contractor, or (b) a basic fitted wardrobe consisting only of a wall-to-wall unit with a hanging rail or shelf for clothes and shelves — with no drawers, shoe racks, or decorative panelling?"*

Answer `confirmedAnswer: true` for either qualifying path. Answer `confirmedAnswer: false` only when neither path applies. Do not assume "bedroom furniture" means `false` — a basic wardrobe satisfying the structural conditions above is `true`.

---

## HMRC reference

All routing decisions reference **HMRC Notice 708 — Buildings and Construction**:
https://www.gov.uk/government/publications/vat-notice-708-buildings-and-construction