Updated guidance published on the reduced rate of VAT for construction services
The Customs and Excise Division has published updated guidance on when the reduced rate of VAT (5%) applies to qualifying construction services carried out on certain buildings in the Isle of Man.
Reduced Rate Notice – Construction Services in the Isle of Man.
The Notice provides clarity for VAT registered businesses, homeowners, charities and places of worship on the buildings and services that may qualify for the reduced rate. It includes guidance on eligible buildings, qualifying construction and repair work, the treatment of building materials, and the VAT responsibilities of contractors and sub-contractors.
The reduced rate applies to a range of services carried out on eligible buildings in the Isle of Man, including alterations, extensions, repairs and maintenance, provided the conditions set out in the Notice are met.
The revised guidance now includes a more comprehensive range of practical examples to help businesses determine when the reduced rate applies. Key updates include the addition of the supply and installation of manual blinds and electric vehicle charging points at eligible properties. Following a review of the definition of building materials for VAT purposes, the installation of artificial grass, including astro turf, does not qualify for the reduced rate and is therefore no longer included in the list of qualifying services.
Businesses involved in construction projects are encouraged to review the Notice to ensure the correct VAT treatment is applied. Further VAT guidance is available on the VAT webpage.
