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Thread: Trashed Scout Hut

  1. #31
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    Quote Originally Posted by IvanOpinion View Post
    True, although reusing foundations is OK. VAT Notice 708 3.2.1 says "A qualifying building is constructed when it is built from scratch, and, before construction starts, any pre-existing building is demolished completely to ground level (cellars, basements and the ‘slab’ at ground level may be retained)"

    If the damage to the building was limited, so we could reuse some of the building, then VAT would apply. But we would need less rebuilding work, so the cost ex-VAT would be lower. So even with VAT added I can't see how the cost would be anywhere close to £470k.

    Anyway, they would not budge on this, but I don't think the extra premium was a lot, so I gave in. I decided that if we ever need to do a full rebuild we would not opt to zero-rate it, so we would not have any restrictions on usage of the hall over the 10 years following the rebuild.
    I'm assuming then that there are points where a savvy loss adjuster will say that the remaining walls need to be knocked down even though they're still serviceable, because the cost of rebuilding those is less than the cost of VAT on the whole rebuild.

  2. #32
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    Quote Originally Posted by campwarden View Post
    I'm assuming then that there are points where a savvy loss adjuster will say that the remaining walls need to be knocked down even though they're still serviceable, because the cost of rebuilding those is less than the cost of VAT on the whole rebuild.
    That would make sense. If the incremental VAT exclusive cost of doing a full demolition and rebuild is less than 20% extra, the insurer would be better off paying for the extra work (as they can't recover any VAT themselves).

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