VAT — Meaning of “protected building” — Whether alteration to non-residential outbuilding within curtilage of listed building qualifying for zero-rating — Construction of note (1) to Group 6 of Schedule 8 to Value Added Tax Act 1994 — Appeal allowed
The respondent owned a listed building consisting of a dwelling-house with an outbuilding. It obtained listed building consent for the construction of an indoor swimming pool and for the conversion of the outbuilding into changing and games facilities together with a garage. The appellant commissioners took the view that VAT would be payable on the works, but, on appeal, the VAT and Duties Tribunal held that the works qualified for zero-rating as “an approved alteration of a protected building” within the meaning of item 2 of Group 6 of Schedule 8 to the Value Added Tax Act 1994.
Note (1) to Group 6 defined a protected building as a building that was designed to remain as, or become, a dwelling following the alteration, and was a listed building within the meaning of the Planning (Listed Buildings and Conservation Areas) Act 1990. Section 1(5) of the 1990 Act gave an extended meaning to “listed building” so as to include “any object or structure within the curtilage of the building which, although not fixed to the building, forms part of the land and has done so since before 1 July 1948”.
On an appeal by the commissioners, the issue arose as to whether a structure such as the outbuilding, which was not designed to become a dwelling following the alteration, but which lay within the curtilage of a listed building so as to fall within the section 1(5) definition of that term, qualified as a protected building for the purposes of the 1994 Act. The courts below held that it did qualify, and the commissioners appealed.
Held (Lord Nicholls of Birkenhead dissenting): The appeal was allowed.
The definition of “protected building” in note (1) could be divided into three integers: “(i) A building (ii) which is designed to remain as or become a dwelling (as defined in note (2)) after the alteration (iii) and which is a listed building within the meaning of the 1990 Act.” The requirements that the subject matter of the “approved alteration” should be a building and that it should be designed to become a dwelling indicated that parliament intended to give the benefit of item 2 of Group 6 to a subset of listed buildings and scheduled monuments, namely those that were buildings to be used for residential purposes, rather than to all listed and scheduled structures.
Paul Lasok QC and Paul Harris (instructed by the solicitor to Customs & Excise) appeared for the appellants; John Walters QC and Philip Brunt (instructed by Wallace & Partners) appeared for the respondent.
Sally Dobson, barrister
