In Lady Henrietta Pearson v HMRC (TC02735 – 17 June) a woman (P) obtained planning permission for the conversion of two adjacent derelict barns into ‘a live-work unit’ and claimed a refund of VAT under VATA 1994 s 35. HMRC rejected the claim on the basis that the work failed to meet the requirements of VATA 1994 Sch 8 Group 5 Note 2(c). The First-tier Tribunal allowed P’s appeal. Judge Bishopp expressed the view that ‘it is not the province of HMRC or this tribunal to police the planning rules’ and held that ‘there has been compliance with the spirit even if not the strict letter of the consent’.
Why it matters: There have been conflicting decisions on the interpretation of VATA 1994 Sch 8 Group 5 Note 2(c) which provides that a building can only qualify as a dwelling...
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