The following Value Added Tax guidance note Produced by Tolley provides comprehensive and up to date tax information covering:
This guidance note looks at when a building is ‘designed as a dwelling or a number of dwellings’ for VAT purposes.
Detailed discussion of the legislation and case law on dwellings can be found in De Voil Indirect Tax Service V4.232BA.
There are four key conditions that need to be met for a building to be considered to be ‘designed as a dwelling’ for VAT purposes:
it must have self-contained living accommodation
there must be no direct internal access between other dwellings or parts of a other dwellings
there must be no covenants, statutory planning consent or similar provisions which prevent the separate use or disposal of the dwelling
the construction / conversion must be carried out in accordance with statutory planning consent
VATA 1994, Sch 8, Group 5, Note 2
These conditions are explored further in this guidance note.
For a building to have self-contained living accommodation, it must have the basic elements of living so HMRC expects to see the following at a minimum:
Notice 708, para 15.3.1
These might not all be in their own rooms and could be spread over two rooms like in a studio flat.
In fact, HMRC accepts that th
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