^{Monday 28th June 2010}

UK holiday homeowners have been handed a tax break by HMRC after they announced that VAT associated with conversion and construction of holiday homes is now recoverable under the DIY Housebuilders and Converters Scheme.

The decision follows a VAT Tribunal where it was successfully argued that the cost of VAT materials and services supplied in the construction of new holiday homes and the conversion of non-residential buildings into holiday homes for non business purposes should be recoverable. In addition, any VAT incurred over the past four years can also be reclaimed.

The DIY Housebuilders and Converters Scheme was first introduced in 1974 and refunds VAT incurred on the cost of building materials and on conversion services for private individuals.

Terry Dockley, VAT director at accountants and business advisers James Cowper said: “The decision applies to individuals who purchase land or buildings with the view to build new holiday homes or convert existing buildings into holiday homes. It effectively applies the same VAT recover was enjoyed by self-builders under the DIY Housebuilders and Converters Scheme.”