Construction ― enlargements, extensions and annexes to existing buildings

By Tolley
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The following Value Added Tax guidance note by Tolley provides comprehensive and up to date tax information covering:

  • Construction ― enlargements, extensions and annexes to existing buildings
  • What is an existing building?
  • What is meant by enlargement, extension or annexe?
  • When can the construction of an enlargement or extension be zero-rated?
  • When can the construction of a charitable annexe be zero-rated?
  • Practical points ― enlargements, extensions and annexes of existing buildings

This guidance note examines the exclusion from the zero rating for construction services that applies to the following kinds of works performed on existing buildings enlargements unless they create additional dwelling s extensions unless they create additional dwelling s constructing annexes except certain charitable annexes VATA 1994 Sch 8 Group 5 Notes 16 b c 17 This should be read alongside the Construction zero rating of construction services guidance note which sets out the scope of zero rating for construction services In depth commentary on enlargements extensions and annexes can be found in De Voil Indirect Tax Service V4 232I enlargements and extensions and De Voil Indirect Tax Service V4 232J annexes As these kinds of construction services are excluded from zero rating they will generally be standard rated although some works may qualify for reduced rating For reduced rated construction services see the Conversion reduced rating conversions to different residential use and Renovations and alterations reduced rating works on empty homes guidance notes What is an existing building The meaning of an existing building in this context is as described in the Construction conversion reconstruction and alteration of existing buildings guidance note What is meant by enlargement extension or annexe There are no legislative definitions of the terms enlargement extension or annexe and this can cause practical difficulties for determining the VAT treatment of construction services Often it is not necessary to distinguish between the three terms because most enlargements annexes and extensions will be excluded from zero rating anyway However one common area of dispute concerns charitable annexes and extensions This

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