Valued added tax in construction

This article is all about Value Added Tax in construction (VAT):

Value added tax (VAT) shall be excluded from any bill of quantities (BQ) that is used as a tender document, pricing document or valuation document.

This is because in general, VAT is excluded from all costs in construction. The reason for this is that VAT is subject to a lot of technical rules and vat bills will depend on a lot of different variables.

Lets say a Client is constructing an apartment block. The VAT rate on the construction costs is not necessarily the standard VAT rate charged on goods and services.

We leave vat out in construction so we can simply concentrate on the construction costs. The final figure of VAT due will be decided by the accountants.

Who deals with Valued added tax in construction ?

A qualified accountant should be contacted by the Client to understand how much VAT their construction costs will generate.

Notwithstanding this, if required by the employer, provision for the contractor to provide a VAT assessment as part of his tender return can be incorporated in the form of tender.