NSFA

Spray Foam Removal VAT Exemptions

Can you claim VAT relief on removal costs?

The Short Answer

Most spray foam removal is subject to standard 20% VAT.

However, VAT relief (5% reduced rate or 0% zero-rate) may apply in specific circumstances involving property renovation, conversion, or listed buildings. Understanding these exemptions could save £600-£4,000 on removal costs.

Standard VAT Rate (20%)

When 20% VAT Applies

Standard rate VAT applies to spray foam removal in these situations:

  • •

    Removal from occupied residential property

    Your home is currently lived in and you're removing foam to facilitate sale or remortgage

  • •

    Standalone removal service

    Removal only, not part of larger renovation or building work

  • •

    Removal from investment property

    Buy-to-let or rental property that's currently tenanted or available for rent

  • •

    Commercial property

    Business premises or commercial buildings

Cost Impact Example:

Removal cost (net): £6,667

VAT at 20%: £1,333

Total cost: £8,000

Reduced Rate VAT (5%)

When 5% VAT Applies

Reduced rate VAT (5%) applies to qualifying renovation or conversion work on residential properties:

1. Residential Conversion

Converting non-residential building (commercial, agricultural) into residential dwelling.

Example:

You're converting a barn or commercial warehouse into residential home. Spray foam removal is part of the conversion work. Entire project qualifies for 5% VAT including removal.

✓ Removal VAT: 5% (if part of overall conversion invoice)

2. Renovation of Empty Property (2+ Years)

Renovating residential property that has been empty/uninhabitable for 2+ years.

Requirements:

  • • Property empty for at least 2 years before work starts
  • • Renovation makes property habitable
  • • Building work must be "approved alterations"

Example:

Property vacant since 2022, now 2025. You're undertaking major renovation including spray foam removal, re-roofing, rewiring. Entire renovation qualifies for 5% VAT.

✓ Removal VAT: 5% (if part of qualifying renovation invoice)

3. Multiple Occupancy Conversion

Converting single residential unit into multiple units (e.g., house into flats) or vice versa.

Example:

Converting large house into 3 flats. Spray foam removal needed as part of conversion works. Project qualifies for 5% VAT.

✓ Removal VAT: 5% (if part of conversion invoice)

Important Conditions for 5% VAT:

  • • Removal must be invoiced as part of larger qualifying project (not standalone)
  • • Contractor must issue single invoice for all works including removal
  • • Property must meet HMRC criteria for conversion/renovation
  • • Work must result in habitable residential dwelling
  • • Cannot separate removal invoice to claim reduced rate

Cost Impact Example:

Removal cost (net): £6,667

VAT at 5%: £333

Total cost: £7,000

Saving vs 20% VAT: £1,000

Zero-Rated VAT (0%)

When 0% VAT Applies

Zero-rating (0% VAT) applies in very limited circumstances:

1. New Build Construction

Constructing entirely new residential dwelling from ground up.

Example:

New house construction. Previous owner had foam installed in roof, you're removing it during construction phase before completion.

✓ Removal VAT: 0% (if part of new build contract)

Rare scenario: Unusual to have foam already present in new construction

2. Protected Buildings

Approved alterations to listed buildings meeting HMRC criteria.

Requirements:

  • • Building is Grade I, II*, or II listed
  • • Alterations approved by relevant authority (Historic England, etc.)
  • • Work is for dwelling used as residence
  • • Removal is "approved alteration" necessary for preservation

✓ Removal VAT: 0% (if approved alteration on listed building)

Cost Impact Example:

Removal cost (net): £6,667

VAT at 0%: £0

Total cost: £6,667

Saving vs 20% VAT: £1,333

How to Claim VAT Relief

Step 1: Determine Eligibility

Before hiring contractor, confirm your project qualifies:

  • • Check HMRC guidance (VAT Notice 708: Buildings and construction)
  • • Consult with VAT specialist or accountant
  • • Verify property status (empty 2+ years? Listed? Conversion?)
  • • Get written confirmation from HMRC if unclear (allow 4-6 weeks)

Step 2: Inform Contractor Before Quoting

Tell removal contractor you believe reduced/zero rate applies:

  • • Explain project nature (conversion, renovation, listed building)
  • • Provide evidence (planning permission, listing certificate, empty property proof)
  • • Request quote at reduced/zero VAT rate
  • • Contractor will need to verify eligibility for their records

Step 3: Bundle Removal with Qualifying Work

For 5% rate to apply, removal must be part of larger project:

  • • Coordinate removal with other renovation/conversion contractors
  • • Request single invoice covering all works (or clearly linked invoices)
  • • Ensure removal is described as necessary part of qualifying project
  • • Cannot artificially bundle unrelated work just to claim relief

Step 4: Complete VAT Certificate

For reduced/zero rate work, you must provide signed certificate:

  • • Contractor will provide VAT certificate template
  • • You certify property qualifies for relief (conversion, renovation, etc.)
  • • Sign and date certificate before work commences
  • • Contractor keeps certificate as evidence for HMRC
  • • False certification can result in penalties

Step 5: Verify Invoice Shows Correct VAT Rate

Final invoice must clearly state VAT treatment:

  • • Invoice shows net amount
  • • VAT rate clearly stated (0%, 5%, or 20%)
  • • VAT amount calculated correctly
  • • Total including VAT
  • • Reference to qualifying work (conversion, renovation, etc.)

Common VAT Relief Mistakes

  • ✗

    Assuming removal automatically qualifies for reduced rate

    Default is 20% VAT. You must prove eligibility for reduced rate—don't assume.

  • ✗

    Requesting separate removal invoice to claim relief

    Relief only applies when removal is part of qualifying project invoice. Cannot split invoices to manipulate VAT rate.

  • ✗

    Not completing VAT certificate

    Without signed certificate, contractor cannot apply reduced rate. Complete certificate before work starts.

  • ✗

    Claiming relief on occupied home removal

    Standard 20% applies to occupied residential property unless part of qualifying conversion/renovation work.

  • ✗

    Falsely certifying property qualifies

    HMRC can investigate and impose penalties for false VAT certificates. Only certify if genuinely qualifies.

VAT Savings Examples

Example 1: Semi-Detached House (Occupied, Standalone Removal)

Net removal cost: £6,250

VAT rate: 20% (standard)

VAT amount: £1,250

Total: £7,500

Example 2: Barn Conversion (Residential Conversion Project)

Net removal cost: £8,333

VAT rate: 5% (reduced - conversion)

VAT amount: £417

Total: £8,750

Saving vs 20%: £1,250

Example 3: Grade II Listed Property (Approved Alterations)

Net removal cost: £10,000

VAT rate: 0% (zero-rated - listed building)

VAT amount: £0

Total: £10,000

Saving vs 20%: £2,000

Example 4: Large Detached (Empty 2+ Years, Major Renovation)

Net removal cost: £13,333

VAT rate: 5% (reduced - empty property renovation)

VAT amount: £667

Total: £14,000

Saving vs 20%: £2,000

The Bottom Line on VAT

Most homeowners pay 20% VAT on spray foam removal (standard rate for occupied residential property).

Reduced 5% rate applies to qualifying conversions, renovations of empty properties (2+ years), and multi-occupancy changes—but removal must be part of larger project.

Zero-rating (0%) is rare, limited to new builds and protected buildings with approved alterations.

Check HMRC guidance or consult VAT specialist before assuming relief applies. Potential savings: £600-£4,000.

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