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D & Mrs E Sherratt v HMRC

In D & Mrs E Sherratt v HMRC (TC01179 – 7 June) a couple arranged for the construction of a new farmhouse adjacent to some existing farm buildings.

They reclaimed input tax under VATA 1994 s 35. HMRC rejected the claim on the grounds that the relevant planning permission prohibited the separate disposal of the house so that the effect of VATA 1994 Sch 8 Group 5 Note 2(c) was that it did not qualify as a ‘building designed as a dwelling’.

The Tribunal dismissed the couple’s appeal against this decision.

Why it matters: To the traditional ‘man on the Clapham omnibus’ the house here was clearly a ‘building designed as a dwelling’.

However because it could not be disposed of separately from the existing farm buildings the effect of Sch 8 Group 5...

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