A new guide, created by St Andrews Men’s Shed (StAMS) and shared with the SMSA, details their experience to use the DIY Housebuilders Scheme to reclaim £10,000 in VAT from HMRC on eligible buildings following the construction of their new Shed building.

The guide explains how StAMS approached the claim and highlights some of the practical lessons that other Sheds may find useful when planning their own building projects. A key point is that the VAT relief applies to qualifying new charity buildings, rather than ordinary refurbishments, repairs or extensions.

The guide also explains the two main routes available:

• having eligible construction work zero-rated by a contractor, or paying VAT on eligible materials and reclaiming it afterwards
• StAMS chose to reclaim VAT on materials because members were carrying out a significant amount of the construction work themselves

The guide covers the evidence required, including planning permission, building plans and the completion certificate, as well as the importance of keeping invoices and payment records organised.

One of the most useful lessons from the StAMS experience concerns record keeping. Where possible, invoices should be made out in the Shed’s name and paid directly by the Shed. Where members purchase materials themselves and are subsequently reimbursed, careful records should be maintained to create a clear audit trail.

The guide also highlights the importance of separating out any VAT already covered by grant funding and explains the timescales involved. Although StAMS was initially told its claim would be dealt with within three months, the Shed ultimately waited eight months for its refund.

StAMS initially submitted a claim for £13,500 of VAT and ultimately received £10,000 from HMRC. While the experience was not without its challenges, the successful claim demonstrates that VAT recovery can make a significant difference to the finances of a Shed undertaking a major new-build project.

Key messages for Sheds: check your eligibility early, keep your paperwork and invoices in order, make sure grant-funded VAT is excluded where appropriate, and be prepared for the process to take time.

The full guide provides a practical overview of the StAMS experience and is intended to help other Sheds understand the process and consider whether VAT recovery may be relevant to their own building projects.

Please note that the guide is based on St Andrews Men’s Shed’s experience and should not be taken as professional tax advice. Sheds considering a claim should check the current HMRC guidance and seek appropriate advice where necessary.