In M Lennon & Co v HMRC [2015] UKFTT 296 (23 June 2015) the FTT held that the sale of a new building which included the façade of the original building did not qualify for zero-rating in circumstances where the façade had not been retained to comply with planning permission.
M Lennon & Co was appealing against HMRC’s determination that a sale of residential property which had been the object of extensive redevelopment was an exempt supply so that input tax attributable to that supply could not be recovered. Under VATA 1994 Sch 8 Group 5 the first grant by a person constructing a building is zero-rated excluding a conversion unless it falls within Note 18. This occurs when:
‘(a) [the building is] demolished completely to ground level; or
‘(b) the part remaining above ground level consists of no...
