RE:UK response to VAT treatment of land intended for the construction of new social housing

Overview

We have responded to the Government’s consultation on the VAT treatment of land intended for the construction of new social housing. We support the proposed zero rate, which has the potential to reduce unnecessary complexity, improve viability and help bring forward housing delivery.

Our key asks

We recommend that Government:

• Determines the zero rate primarily by whether the recipient of the land is a registered provider, rather than relying on a definition of social housing that risks creating unhelpful cliff edges.
• Ensures the legislation recognises the commercial realities of modern development, including phased, mixed-tenure and mixed-use schemes.
• Builds on existing VAT concepts, certification procedures and administrative mechanisms, supported by clear and practical HMRC guidance.
• Consults relevant representative bodies and respondents on the draft legislation, guidance and certification processes before they are brought into effect.