Tax Case - Holistic appeal

Zielinski Baker & Partners Ltd was instructed by the owner of a house which was a building listed under the Planning (Listed Buildings and Conservation Areas) Act 1990, to construct an indoor swimming pool and convert an outbuilding into changing and games facilities. The outbuilding, which had been built in 1830 at the same time as the main house, had only been used for residential purposes for about 12 months in 1945.

Customs raised an assessment for VAT, but the taxpayer appealed against part of the assessment, contending that the work done on the outbuilding was zero rated, pursuant to section 30, VATA 1994, as it was an approved alteration to a listed building. The tribunal allowed the appeal.

The Chancery Division allowed Customs' subsequent appeal, holding that under Group 6 (protected buildings) of Schedule 8 to the Act, a building did not qualify as a protected building if it did not contain within itself one or more dwellings with self-contained living accommodation. The taxpayer appealed, submitting that the outbuilding was to be treated as part of the main building and thus fell within the definition of a protected building in note (1) of Group 6.

In the Appeal Court, it was held that the definition of a protected building in note 1(a) of Group 6 extended the ambit of a listed building over any separate structure within its curtilage provided that it had formed part of the land since before 1 July 1948. A holistic, rather than a methodical, approach should be applied to the question whether, for the purposes of the Act, the outbuilding should be treated as a separate building which had to qualify on its own as a protected building. On that basis, the outbuilding was to be treated as part of the main building, and the work done to it was zero rated as approved alterations to a listed building.

The taxpayer's appeal was allowed.

(Commissioners of Customs and Excise v Zielinski Baker & Partners Ltd, Court of Appeal, 17 May 2002.)

Issue: 3859 / Categories: