The comprehensive guide, curated by the firm’s tax experts, is designed to help individuals shave thousands of pounds off the costs of construction, offering step-by-step guidance for each stage of the process.

“It’s crucial for individuals embarking on self-build projects to understand the intricacies of VAT regulations,” said Alan Davis, tax partner at Henderson Loggie. “How you plan your project could have an implication on VAT so it’s important to choose an approach that minimises irrecoverable VAT cost.

“Contractual arrangements with suppliers and contractors should clearly outline the VAT treatment of goods and services, because if VAT is incorrectly charged by contractors, HMRC will not repay it under the DIY refund scheme. Our checklist equips self-builders with the knowledge and tools necessary to navigate VAT regulations effectively.”

The new guide provides a detailed roadmap for each stage of the construction process, offering step-by-step guidance on essential aspects such as researching current VAT regulations, identifying VAT-free supplies, such as contractor supplies of construction services and related building materials including energy efficient items like heat pumps, budgeting for irrecoverable VAT liabilities, and maintaining accurate records to support VAT claims.

There are detailed rules on what can and can’t be claimed. For example, VAT cannot be reclaimed on professional services such as architects’ fees and structural engineers’ services. Ensuring compliance with VAT regulations and keeping meticulous records can enhance the chances of optimised successful VAT reclaims. Self-builders only have one opportunity to make a DIY claim so it’s important that any claim is clean to give it the best prospect of early and full settlement, by avoiding HMRC query.

Mr Davis added: “HMRC 2023 statistics show that the average claim paid is around £15,000 but historically that has been reduced by 20-30% from the original claim.

“It is definitely worth seeking help from professional advisors to avoid losing out, particularly as HMRC can issue penalties where VAT claims are overstated or incorrect.”

As construction projects near completion, the guide advises on reviewing VAT records, obtaining a certificate of practical completion from the local authority, and submitting the online VAT reclaim within the 6-month specified timeframe.