Value Added Tax Act 1994 Schedule 13 para 10

Supplies during construction of buildings and works

Schedule 13 paragraph 10 deals with how certain supplies of goods and services made during the construction of a building or civil engineering work are treated for capital goods scheme purposes, specifically determining whether they form part of the owner's capital item.

• When a building or civil engineering work is being constructed, supplies of goods and services used in that construction may be treated as part of the capital item for the purposes of the capital goods scheme.
• This provision ensures that the VAT incurred on construction-related supplies is brought within the adjustment mechanism of the capital goods scheme, rather than being treated as standalone input tax claims.
• The rule applies to the owner of the building or work, linking the construction supplies to the completed capital item so that input tax adjustments can be tracked over the relevant adjustment period.
• The provision was amended by the Value Added Tax (Buildings and Land) Order 2008 (SI 2008/1146), which updated the rules relating to buildings and land within the capital goods scheme framework.

---