Commentary

V16.1022 VAT on buildings that are dwellings and used for a relevant residential purpose

Part V16 Forms and other HMRC material

V16.1022 VAT on buildings that are dwellings and used for a relevant residential purpose

V16.1022 VAT on buildings that are dwellings and used for a relevant residential purpose

Information Sheet 2/14, January 2014

What is this information sheet about?

This Information Sheet provides guidance on the application of the zero-rate for VAT on buildings that are designed as a dwelling or dwellings (meeting the conditions of VATA 1994 Sch 8 Group 5 Note 2) and are intended for use as a building used for a relevant residential purpose (RRP) (meeting the conditions of VATA 1994 Sch 8 Group 5 Note 4).

This Information Sheet updates the relevant sections of Notice 708 and Manual VCONST.

Can a relevant residential purpose building also be treated as dwellings?

For the vast majority of buildings potentially eligible for zero-rating, you will know from the outset whether you are constructing or purchasing a new building that is designed as a dwelling or is intended to be used solely for a relevant residential purpose (RRP). However, since the zero-rate for dwellings is based on the design of the building and for RRPs based upon its use, HMRC accept that there may be instances where a building could qualify for zero-rating under both of these provisions at the same time. In such cases, a taxpayer is free to rely on either provision to achieve zero-rating for their building.

For example, if a building is intended to be used solely for a RRP but also meets all the conditions of VATA 1994 Sch 8 Group 5 Note 2 (in that it takes the form of a building designed

To continue reading
View the latest version of this document, as well as thousands of others like it, sign in to TolleyLibrary or register for a free trial