Statutory planning consent for a new dwelling

The project related to the demolition of a building known as Drumduan Coach House and the construction of a new dwelling. When the taxpayer started construction the only planning permission in place related to the ‘alterations and extension’ to the existing dwelling. After discussions the local authorities granted a building warrant rather than a demolition warrant because the property was going to be demolished and rebuilt.

Ultimately the result was that the company supplied construction services to build a new dwelling but at the time it carried out the work there was no ‘statutory planning consent’ in place for a new dwelling. Retrospective consent was not acceptable because as with many VAT issues the relevant issue is the known facts and evidence at the time of the supply. As a result one of the zero-rating conditions in VATA 1994...