Industry & PartnersMortgage BrokersRefurbishment & Retrofit Clients: 5% Long-Empty Relief, 0% Energy-Saving Materials
Clients carrying out major refurbishment, improving a long-empty property, or installing energy-saving measures can qualify for significant VAT reliefs that contractors routinely miss. Works on a property that has been empty for a significant period may qualify for the 5% reduced rate. Qualifying energy-saving material installations — insulation, air-source and ground-source heat pumps, solar PV, battery storage, heating controls — are currently 0% when supplied and installed by a contractor. On bridging and refurbishment finance timescales, these rates directly affect how much the client needs to borrow.
The same refurbishment project can carry all three rates depending on the property's history, the works being undertaken and how they are procured. A contractor who defaults to 20% across a long-empty renovation with an ESM package can overcharge tens of thousands — VAT the client finances on their facility. Different rules apply to supply-only purchases and supply-and-install packages, so the procurement route matters as much as the specification.
Renovation works on a property that has been empty for a significant period may qualify for the 5% reduced rate on contractor services under HMRC Notice 708. The property's history and evidence of the empty period determine eligibility.
Insulation, air-source and ground-source heat pumps, solar PV, battery storage and heating controls supplied and installed by a contractor in a domestic building are currently zero-rated. Supply-only purchases by the client are 20% — the same measure, a different procurement route, a different rate.
General refurbishment of an occupied or recently occupied home is standard-rated. The VAT position depends on the history of the property, the works being undertaken and whether particular reliefs apply — a mixed project needs each element assessed.
Bridging and refurbishment facilities run on short terms. VAT errors discovered at exit are financed errors. Reviewing the rate position before works are procured — and checking invoices as they arrive — keeps the facility sized to the true cost.
VATBuild reviews the property history, the works and the procurement route to identify which reliefs may apply, then checks each invoice line against the correct rate — 5% long-empty works, 0% qualifying ESM installations, 20% general works. Incorrect charges are flagged with supplier correction drafts while the contractor is still engaged, keeping the client's facility sized to the true project cost.