L Swain v HMRC

In L Swain v HMRC (TC02719 – 11 June) a county council had granted planning permission for the conversion of four derelict barns into holiday accommodation. However the work was not proceeded with and the barns remained derelict. Subsequently a woman (S) purchased one of the barns and converted it into a house. The relevant planning permission provided that the occupation of the building ‘shall be limited to a manager or proprietor of the holiday accommodation business’. S reclaimed VAT on the conversion. HMRC rejected the claim on the grounds that the effect of VATA 1994 Sch 8 Group 5 Note 2(c) was that the converted building was not ‘designed as a dwelling’.

The First-tier Tribunal dismissed S’s appeal. Judge Poole specifically declined to follow Judge Kempster’s decision in Burton v HMRC (TC02522). He observed that the effect of Town and Country Planning Act 1990 was that...