A new secure unit was built in the grounds of Ayrshire Central Hospital. Its purpose was to provide long-term residential inpatient care for young people aged 12 to 17 who had severe mental health problems. The average stay was 12 to 18 months.
A dispute arose as to whether the construction services qualified for zero rating as being relevant to a new building used for a ‘relevant residential purpose’ – similar to student accommodation or a care home for elderly people – or whether the building was classed as a ‘hospital … or similar establishment’ which is specifically excluded from zero rating by virtue of VATA 1994 Sch 8 Group 5 Note (4).
The taxpayer’s view was that the building was the residential home of the patients the 12 ensuite bedrooms plus communal space included their own possessions and they also received mail there. The...
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