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New VAT Youtube Video - worth a look

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This is a copy of Andrew Jones's on stage presentation at The Home Building & Renovating Show in March 2024 at the NEC (Suggest you watch on youtube)  - 


Edited by Andrew Jones
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Hi @Andrew Jones - great presentation.


I noticed the comment about outbuildings not being eligible in your presentation.


I've tried engaging with HMRC on this topic given that it is now accepted that a dwelling can consist of more than one physical building for VAT purposes (see Revenue and Customs Brief 13 (2016)) and yet HMRC still insist in their VAT documentation that a garage is the only "outbuilding" eligible for relief?


In VAT431C-form-and-notes_22, Note 19 refers to other buildings. Specifically, it mentions detached workshops and detached swimming pools as two examples where you cannot claim the VAT back. But if a swimming pool was contained within the house, then you could claim the VAT back. So the issue seems to be that they are detached. But this guidance is then contrary to the guidance in Brief 13 (2016) which states that HMRC accepts that the law doesn't require a dwelling to be formed from a single building and that a number of buildings may be combined to form a single dwelling as long as they are designed to function together for that purpose.


So why would a workshop/craft/art room/swimming pool in the "main house" be eligible, but if they were in a separate building they would not be?


HMRC continue to point to their written guidance but the argument is one of law, not whether what they state in their guidance should be taken as correct.


Unfortunately, through the online forums and "after consulting with their DIY team" they say they are unable to provide an answer and that I should instead contact VAT Clearances with a copy of the plans for the development and my specific query. As I'm not at that stage yet, and only want clarity on whether I would be able to reclaim VAT or not for a detached workshop from a budgetary and planning perspective, I'm unable to progress this further.


Have you encountered anything like this over the past few years?

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The same applies to your comments about a workshop at the rear of a detached garage or extra living accommodation above a garage and apportionment. Why would the extra living accommodation as a separate detached building (but single dwelling) be eligible according to the Brief, but not if it was above a detached garage? It just makes no sense - both from a common sense perspective and as I interpret the current VAT legislation and the case law that prompted Brief 13 (2016).

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19 hours ago, garrymartin said:

.. but not if it was above a detached garage?


I remember reading that in VAT 708. At the time I wondered if it was intended to refer to people converting a garage roof space to a habitable room in the grounds of an already constructed house. That wouldn't be zero rated for the same reason as an extension or alteration.


However I've just looked for in in VAT 708 and can't find it. Has it been removed or did I miss it? I looked at all 48 instances of the word "garage" and 5 of the word "above".



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@Temp I've seen it in the notes for VAT431NB and VAT431C but I can't seem to find a link to those notes on a gov.uk website at the moment... However, I do have a copy of VAT431NB saved (extract attached below).


I have versions of this guidance from 2015 and from 2022 and they are the same. Therefore this guidance hasn't been updated since the case law I mentioned above (2016), so my contention is that prior to that case, the only detached building allowed was a garage. Following that case, a number of buildings can consist a single dwelling and therefore detached versions of items that are eligible when in the "main house" should now also be allowed and the guidance should be updated accordingly. If a swimming pool is allowed in the "main house" then a detached swimming pool, designed solely for the use of the single-family occupants of a dwelling should also be allowed.


There is also case law for "relevant residential purposes" that covers this scenario too, where workshops or administration blocks associated with and built at the same time as residential accommodation blocks have been zero rated.



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On 02/04/2024 at 08:09, Andrew Jones said:

Happy to explain these issues to you. It’s long winded and if's and buts involved. Feel free to call me (phone number removed) (admin - remove if unacceptable)

Members can petition @Andrew Jones directly via PM, please feel free to do so.

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