The VAT DIY housebuilders scheme gives DIY homebuilders the ability to reclaim the VAT they pay on building materials for any section of the build they undertake themselves. It also applies to individuals converting a non-residential building into their own home. 

Following the announcement at Spring Budget 2023, HMRC has confirmed the introduction of a digital claims process for the scheme. HMRC states that “this will make it easier for claimants to reclaim their VAT”. The digital process will be designed to minimise errors and help claimants get their claims right. The process will also be simplified by removing the requirement to submit invoices with the claim. 

The digital claims process should be easier for most taxpayers and will speed up HMRC’s processing of the claim. However, paper-based claims will remain as an option for those that cannot use the digital process. 

HMRC is also extending the time limit for DIY claims to six months after completion of the build. The previous time limit was three months after completion. HMRC expects that this will result in fewer omissions and errors as claimants will have more time to ensure they have gathered the necessary documents to complete the claim correctly. 

The digital process and other changes to the rules of the scheme come into effect in relation to claims made on or after 5 December 2023. More details regarding the digital process will be announced in due course. 

Further reading: 

• VAT: Digitisation of claims and extending time limit for DIY Housebuilders Scheme - GOV.UK (www.gov.uk) 
• The Value Added Tax (Refunds to “Do-It-Yourself” Builders) (Amendment of Method and Time for Making Claims) Regulations 2023 (legislation.gov.uk)