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GS Bhachu v HMRC

In GS Bhachu v HMRC (TC02887 – 4 October) a couple purchased a house and engaged a builder (B) to renovate it. B accounted for VAT at the reduced rate of 5% on his supplies. HMRC issued an assessment charging VAT at the standard rate. B appealed contending that his supplies were within VATA 1994 Sch 7A Group 7. The First-tier Tribunal rejected this contention and dismissed his appeal finding that the conditions of Group 7 Note 3 were not satisfied as B had not shown that the house had been unoccupied for two years before the renovation.

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Why it matters: VATA 1994 Sch 7A Group 7 Item 1 provides that certain supplies of services ‘in the course of the renovation or alteration of qualifying residential premises’ qualifies for the reduced rate of VAT. Group 7 Note 3 provides that one...

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