HMRC has revised its policy on when it will allow zero-rating for the construction of residential buildings, where part of an original building is retained. This follows three decisions of the Upper Tribunal in Astral Construction Limited [2015] UKUT 21 (TC), Boxmoor Construction Limited [2016] UKUT 91 (TCC) and J3 Building Solutions Limited [2017] UKUT 253 (TCC).
The general rule for zero-rating is that an existing building must be demolished completely to ground level. HMRC now accepts that it also needs to take account of the nature of the work. In exceptional cases, such as Astral, works on an existing structure may be so extensive as to amount to construction. ‘Very minor’ parts of a building retained above ground level may be treated as ‘de minimis’. Where facades are retained, plans submitted to the planning authority must show evidence that their retention was a condition of planning consent.
See VAT Information Sheet 7/2017: Construction services and zero-rated reliefhttp://bit.ly/2jRl3VA.
HMRC has revised its policy on when it will allow zero-rating for the construction of residential buildings, where part of an original building is retained. This follows three decisions of the Upper Tribunal in Astral Construction Limited [2015] UKUT 21 (TC), Boxmoor Construction Limited [2016] UKUT 91 (TCC) and J3 Building Solutions Limited [2017] UKUT 253 (TCC).
The general rule for zero-rating is that an existing building must be demolished completely to ground level. HMRC now accepts that it also needs to take account of the nature of the work. In exceptional cases, such as Astral, works on an existing structure may be so extensive as to amount to construction. ‘Very minor’ parts of a building retained above ground level may be treated as ‘de minimis’. Where facades are retained, plans submitted to the planning authority must show evidence that their retention was a condition of planning consent.
See VAT Information Sheet 7/2017: Construction services and zero-rated reliefhttp://bit.ly/2jRl3VA.
