The Upper Tribunal’s decision to uphold the First-tier Tribunal in Astral creates opportunity, but also uncertainty regarding what counts as the construction of a new building. This impacts on the VAT liability, potentially making construction jobs zero rated that might have been thought positive rated. It confirms that the incorporation of existing building fabric into an otherwise new building does not automatically preclude classification as ‘new build’ for VAT purposes. The practice will not inevitably mean that the resulting development is an enlargement, conversion or reconstruction. That will depend on the scale of the change and whether the old material is dwarfed by the new.
