VAT is a notoriously tricky thing, so if you’re in any doubt I’d strongly recommend you seek advice from a specialist VAT consultant.

It sounds like the asbestos has been used as a ‘building material’, in which case I believe the labour supplied in conjunction with demolishing the shed and its roof would be eligible for a VAT relief. If you’re completing a self build then this should be mean a zero-rating for VAT, as it becomes part of the work required to deliver the new dwelling.

Some contractors may ask you to ‘prove’ that your project is a self build, which you can usually do by supplying a copy of the approved planning consent. However, one of the considerations for the company involved when zero-rating labour is whether the work is ‘closely connected to the construction of the new dwelling’ and being carried out ‘in the course of construction’. So some careful firms may ask for additional evidence that you are actually progressing with the scheme.

Bear in mind, however, that the removal of materials from a self build site is actually chargeable at the standard rate for VAT. So while services supplied in the demolition of the shed and its roof should be zero-rated, my understanding is that you will have to pay at the normal 20% rate for the proper disposal of the shed and the asbestos.

As you’re probably aware, the removal of asbestos is specialist work and there are strictly-regulated rules on how it can be removed, handled and disposed of. In most circumstances (check the HSE website for guidance) you’ll need to work with a licensed contractor.

Chris Bates, Deputy Editor at Build It magazine

Many thanks for the answer, Chris