VAT – DIY housebuilders scheme – Section 35 of Value Added Tax Act 1994 – Appellant building dwelling on land forming part of equestrian centre – Condition in planning permission restricting occupation of dwelling to persons employed in operation of centre – Whether qualifying for refund of VAT incurred on construction works – Whether meeting condition in note 2 to Group 5 of Schedule 8 to 1994 Act as to absence of prohibition on separate use or disposal of dwelling – Appeal allowed The appellant and his wife acquired an equestrian centre in 2003. The property came with outline planning permission to replace a static caravan on the site with a single-storey dwelling with three or four bedrooms, to be built in the footprint of the caravan. Initially, the appellant and his wife moved into the existing caravan, but in 2005 they obtained full planning permission to build the replacement dwelling, subject to a condition restricting the occupation of the dwelling to a person or persons employed in the operation of the equestrian centre. The building was completed in 2011 and the appellant and his wife moved in. The appellant applied to the respondents for a refund of £10,568.38 in VAT incurred on the construction of the dwelling, pursuant to the DIY housebuilders scheme in section 35 of the Value Added Tax Act 1994. The respondents refused to grant a refund. They took the view that the planning condition prohibited the separate use or disposal of the dwelling, such that the conditions in note 2 to Group 5 of Schedule 8 to the Act were not met. The appellant appealed. He contended that the condition in the planning permission restricted only the category of person occupying the property and did not restrict its separate use or disposal. The respondents contended that the dwelling could not be separated from the equestrian activities on the rest of the site since the occupier of the dwelling had to be employed in the equestrian centre. Held: The appeal was allowed. The planning condition imposed on the construction of the appellant’s dwelling went no further than stipulating who should occupy the dwelling. It placed no prohibition on the separate use or disposal of the property. Nor did it tie the dwelling to the equestrian centre or link the property to the equestrian centre in such a way that they were not independent from each other. The condition was therefore properly characterised as an occupancy condition rather than a prohibition on separate use or disposal. It did not exclude the dwelling from the DIY housebuilders scheme. The appellant appeared in person; Mr Bernard Hayley, officer of HMRC, appeared for the respondents. Sally Dobson, barrister
VAT – DIY housebuilders scheme – Section 35 of Value Added Tax Act 1994 – Appellant building dwelling on land forming part of equestrian centre – Condition in planning permission restricting occupation of dwelling to persons employed in operation of centre – Whether qualifying for refund of VAT incurred on construction works – Whether meeting condition in note 2 to Group 5 of Schedule 8 to 1994 Act as to absence of prohibition on separate use or disposal of dwelling – Appeal allowed The appellant and his wife acquired an equestrian centre in 2003. The property came with outline planning permission to replace a static caravan on the site with a single-storey dwelling with three or four bedrooms, to be built in the footprint of the caravan. Initially, the appellant and his wife moved into the existing caravan, but in 2005 they obtained full planning permission to build the replacement dwelling, subject to a condition restricting the occupation of the dwelling to a person or persons employed in the operation of the equestrian centre. The building was completed in 2011 and the appellant and his wife moved in. The appellant applied to the respondents for a refund of £10,568.38 in VAT incurred on the construction of the dwelling, pursuant to the DIY housebuilders scheme in section 35 of the Value Added Tax Act 1994. The respondents refused to grant a refund. They took the view that the planning condition prohibited the separate use or disposal of the dwelling, such that the conditions in note 2 to Group 5 of Schedule 8 to the Act were not met. The appellant appealed. He contended that the condition in the planning permission restricted only the category of person occupying the property and did not restrict its separate use or disposal. The respondents contended that the dwelling could not be separated from the equestrian activities on the rest of the site since the occupier of the dwelling had to be employed in the equestrian centre. Held: The appeal was allowed. The planning condition imposed on the construction of the appellant’s dwelling went no further than stipulating who should occupy the dwelling. It placed no prohibition on the separate use or disposal of the property. Nor did it tie the dwelling to the equestrian centre or link the property to the equestrian centre in such a way that they were not independent from each other. The condition was therefore properly characterised as an occupancy condition rather than a prohibition on separate use or disposal. It did not exclude the dwelling from the DIY housebuilders scheme. The appellant appeared in person; Mr Bernard Hayley, officer of HMRC, appeared for the respondents. Sally Dobson, barrister
