More than one building can form a single one

HMRC now accepts that single dwellings can be formed from more than one building and has published Revenue and Customs Brief 13/2016 explaining its new policy.

The change of heart comes after the First-tier Tribunal decided in M Catchpole (TC1995) and T Fox (TC1957) that for the purpose of VATA 1994 Sch 8 group 5 the construction of dwellings formed from more than one building are eligible for zero rating.

Under HMRC’s new policy a number of buildings may be combined to form a single dwelling as long as they are designed to function together for that purpose. The following conditions must be met for zero rating to apply:

• the development must meet the conditions of a ‘building designed as a dwelling’ and to this end ‘building’ can mean more than one building;
• all buildings must be constructed or converted under a single project...