Help To Buy - Does revenue check Vat was paid in everything(self build)

thomas 123

Hi Folks,

I am building a house and while searching for quotes I have trades and suppliers offering VAT free to save both me and them money.

Of course I would like to avail of this but I am afraid of getting caught somehow for the help to buy scheme.

https://www.revenue.ie/en/property/help-to-buy-incentive/what-type-of-property-qualifies.aspx

https://www.revenue.ie/en/tax-professionals/tdm/income-tax-capital-gains-tax-corporation-tax/part-15/15-01-46.pdf

"5.What is a Qualifying Residence? Section 477C (1) provides the definition of a “qualifying residence”. (1) The property must be a new build with the construction subject to VAT in Ireland at the rate specified by section"

I believe this is specific to buying a new build and not building it myself.

Any advice much appreciated

DOCARCH

I have not come across this scheme for self-builders?

thomas 123

https://www.boards.ie/discussion/comment/120157443#Comment_120157443

Yeah it’s absolve for self builds, 30k tax return essentially if you meet the conditions - that’s the republic not NI

sydthebeat

https://www.boards.ie/discussion/2058281285/help-to-buy-vat-free-purchases-for-materials

where is this "vat free" option youre talking about?

thomas 123

Sorry if it’s not clear - offering to not charge VAT , saves me money for sure and them also I assume.

eusap

So you want to defraud the state of tax money whilst also taking a tax rebate? See the issue here?

You will need evidence for a mortgage etc.... and they will look for official quotes and invoices and proof the invoices were paid, so it may not be so easy to save money

thomas 123

https://www.boards.ie/discussion/comment/120160205#Comment_120160205

Yeah, I am wondering what, if any, checks and balances are in place for the help to buy.

Its a little more complex than defrauding the state also - My uncle is a blocklayer and is block laying the house as a gift, how do I manage instances like that.

Also, i'm being defrauded by the state on a daily basis - id like the thread not to go that way though as in the example above I have to be sure I am doing the right thing from the outset. Id also like to actually be able to afford to build my house by any means necessary.

Re the mortgage, would the engineer not be signing off on value of works completed? Did not expect the bank to look for receipts at each stage of drawdown.

sydthebeat

VAT will have to be paid on materials.

your thread title makes no sense, and the rest of it is fraud

thomas 123

Can you point to anything in that documentation linked that says same ? How is it checked? Do I need to create spreadsheets and file recipts for everything? Screws, light bulbs , what about things I own already?

so we’ve established it would be fraudulent to not pay VAT on goods - what about services like in my example above ?

I’ll update the title.

sydthebeat

https://www.boards.ie/discussion/comment/120160457#Comment_120160457

if you pay for a service, you must pay vat on that service.

if you get the service for free, you dont need to.

anyone offering their services for cash, vat free, is committing fraud.

how do you intend on purchasing materials without paying vat ?? someone has to cover the vat costs

thomas 123

https://www.boards.ie/discussion/comment/120160473#Comment_120160473

Full disclosure I’ve been pricing things, some lads send back a quote with VAT , then call shortly and offer Vat off for cash. Obviously on any larger parts of a house the savings can be significant as you could imagine, hence the question.

BronsonTB

https://www.boards.ie/discussion/comment/120160520#Comment_120160520

This does happen but it is NOT something you should be openly discussing on an open forum.

eusap

If you were smart for certain items on the build you could apply the 2/3 rules, if the tradesperson buys the materials and if the value of the material is less than 2/3 of the total cost the tradesperson can charge you 13.5 on the total, saving 10%.

In Tax theory if your uncle gifts you Labour he should still pay the VAT on the true value, if he gives you a 90% discount he does not

The bank will look for proof the money was spent! and that you didn't just buy everything on credit and spend the money elsewhere.

screamer

Lads offering vat off for cash won’t give you a detailed receipt either, so good luck if you need to return anything or should anything go wrong. The vat back scheme is intended to refund a portion of the cost of the vat of building a home, it’s not an extra over on top of some dodgy supplier not charging VAT. Your uncle doing the block laying is a gift and should be declared and taxed as such, if you want the truth of it. Remember scammers taking off vat are undercutting others who are trying to run their businesses legitimately paying tax etc, and you’re helping them to do that…… you mightn’t like to know that, but it is what it is.

sydthebeat

https://www.boards.ie/discussion/comment/120160520#Comment_120160520

is it just services they are offereing?

any trade who provides a service and is providing materials as part of this service can charge VAT at 13.5% (provided the cost of the materials is 66% max of the total). If that trade then calls you and offers this same service for cash, without vat, but you have to purchase the materials... you will pay 23% vat.

if they are offering the service plus materials for cash... then the obvious drawback is

1. theres no comeback if the service or product turns out to be defective
2. there will obviously be no contract between you
3. there will be no receipt

plus, if you are building bby mortgage, as youve hinted at, the you will need to be cleared for the total mortgage that it will cost you, including VAT. You cannot go to a mortgage provider and say you can build the house for X figure because your not paying vat etc. They will say, no, in our experience you will need Y to build this house an dthats all they will clear you for.

Deub

https://www.boards.ie/discussion/comment/120160533#Comment_120160533

From the OP’s posts, it seems to be a large scale practice if he received several offers.

DOCARCH

Mod Note: I know it is not the intention of the OP to discuss ways around paying VAT but this thread is starting to sail a little close to the wind. We obey the law on this forum, so no (further) discussion about VAT evasion.

thomas 123

https://www.boards.ie/discussion/comment/120160538#Comment_120160538

That is very valid re catching others out who are abiding by the law - I should have, but I never thought of it like that.

thomas 123

https://www.boards.ie/discussion/comment/120160553#Comment_120160553

So far just materials delivered.

Mortgage is in place and costed at this point.

thomas 123

https://www.boards.ie/discussion/comment/120160537#Comment_120160537

Re the banks: Genuinely interested on what the bank looks for, or more so the format - we are going direct labor so id like to have that right from day 1.

sydthebeat

https://www.boards.ie/discussion/comment/120160691#Comment_120160691

the banks rely on 'stage payment certificates' from a professional that you will have to employ to carry out inspections on the build in order to provide certification on completion

these 'stage payment certs' will have to show that the value of fixed work on site is equal to the value of monies drawn down at that point in time.

SodiumCooled

https://www.boards.ie/discussion/comment/120160205#Comment_120160205

Not to in anyway validate the route the poster is being given the opportunity to go down but all the bank look for to drawdown on my mortgage is the 'stage payment certificates' highlighted by syd, the bank nor anyone else has asked for any actual evidence (invoices, receipts or quotes) for work done or materials.

As someone doing a lot of pricing around for materials I have not had ay materials provider offer a cash discount so I find it quite unusual.

C. Eastwood

https://www.boards.ie/discussion/comment/120165668#Comment_120165668

No Income Tax, no VAT, no money back, no Guarantee - Delboy Trotter.

Citizen Six

https://www.boards.ie/discussion/comment/120160141#Comment_120160141

Not charging vat to you doesn't save them money. Vat is charged by the builder, and then paid to revenue.

sydthebeat

https://www.boards.ie/discussion/comment/120166433#Comment_120166433

yeah thats what im not getting here.. the VAT must be paid by someone down the line, unless the OP is purchasing stolen / second hand goods

Mellor

https://www.boards.ie/discussion/2058281285/help-to-buy-does-revenue-check-vat-was-paid-in-everything-self-build

How would that only apply to buying a house? Revenue ate hardly saying it’s ok to commit tax fraud if your self building.

The link you provided is pretty clear.

What is a qualifying property?

To qualify for HTB, the property that you purchase or self-build must be:

• your home

• newly built with the construction subject to Value Added Tax (VAT) in Ireland.

https://www.boards.ie/discussion/comment/120160307#Comment_120160307

How are you being defrauded by the state? Sounds made up tbh.

If you want to do the right thing, that would include not being being an accessory to fraud.

The sub-contractors may want to know you’re applying to revenue. As revenue may have tax requirements for them. They will also need a solicitor to verify certain aspects of application.

Mellor

https://www.boards.ie/discussion/comment/120166433#Comment_120166433

It doesn’t “save” them money, because they are receiving money, not spending.

If they didn’t make money by doing it, they wouldn’t do it. It should be hard to figure out where the profit is. It’s pretty obvious.

https://www.boards.ie/discussion/comment/120169282#Comment_120169282

No VAT on sales and services that never existed.

SodiumCooled

https://www.boards.ie/discussion/comment/120166433#Comment_120166433

I guess they will keep the cash off the books so while the not charging VAT doesn't save them not declaring the money received does save them on tax etc. It doesn't really make sense though for a business selling products as there is a paper trail, stock records etc so hard to see how they expect to get away with it in the long term. All sounds a bit dodgy.

Citizen Six

https://www.boards.ie/discussion/comment/120176887#Comment_120176887

I was assuming the poster was still using the help to buy scheme, and trying to get cash prices for the work. Obviously you can't do both.

thomas 123

https://www.boards.ie/discussion/comment/120176887#Comment_120176887

Yep, Id agree.

Sticking to above board!