Residential Developments

Spring Budget: VAT for the Building and Property Sector

by Berthold Bauer on March 17, 2023

On Wednesday 15th March 2023, the Spring Budget was delivered by Jeremy Hunt, Chancellor of the Exchequer. The Budget covered a number of measures which you can find here. We have covered a couple of key VAT updates specific to the buildings and property sector below.

VAT: DIY Housebuilders Scheme Digitisation Project

The Government will legislate to digitise the VAT DIY housebuilders’ scheme and will also extend the time limit for making claims from three to six months. These measures aim to improve the overall customer experience, reducing the administrative burden for both claimants and HMRC.

The extended time limit will only benefit those who were not aware of the DIY Refund and are looking to retrospectively submit claims, whereas anyone else is likely to want to submit immediately and delaying purposefully has little merit.

Currently the DIY Housebuilders scheme requires individuals to complete a paper form and submit accompanying documentation via post within three months of works completing. Submitting online should be much easier although how this will allow uploading of all invoices remains to be seen.

No details as yet but this measure looks to be part of the governments strategy to digitise all taxes thus bringing the DIY Housebuilders Scheme in line with other VAT measures current captured by Maxing Tax Digital.

Open Consultation – VAT energy saving materials relief – improving energy efficiency and reducing carbon emissions

At Spring Statement 2022, the Government announced changes to expand the VAT energy saving materials relief in Great Britain, providing tax incentives worth approximately £280 million to improve the energy efficiency of homes over a five-year period to 31 March 2027.

However, there have since been calls across the sector for the relief to be more effective and easier to access.

This Consultation builds on those changes and seeks views on two further potential areas of reform for this relief to meet its intended objectives more effectively. The first potential area of reform is the inclusion of additional technologies and the second is to extend the relief to installations of energy saving materials in buildings intended solely for a relevant charitable purpose.’

The current list of technologies qualifying for relief has largely stayed the same since 2006, aside from the exclusion and then re-introduction of wind and water turbines in 2019 and 2022 respectively. The government is now seeking to understand whether the current listing is up to date and thus effective.

Regarding installations of ESMs in buildings intended solely for a relevant charitable purpose – this is looking to reintroduce what was withdrawn in 2013 after being deemed as inconsistent with EU law. Consequent to the UK leaving the EU, the UK government is considering reinstating this component of the relief.

The period of consultation closes on 31 May 2023.

If you are affected by either of these measures or have further questions, please call us on 01732 868 266 or email at

Berthold BauerSpring Budget: VAT for the Building and Property Sector

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