VAT – DIY refund scheme – Section 35 of Value Added Tax Act 1994 – VAT paid on building materials acquired in course of construction of building designed as a dwelling – Whether materials purchased for construction of outdoor swimming pool refundable – Whether pool part of building designed as dwelling or its site – Appeal dismissed
The appellant constructed a house for his own occupation, which comprised accommodation with four bedrooms surrounding an outdoor swimming pool. Following completion of the works and the grant of a habitation certificate by the local planning authority, the appellant applied, under the DIY refund scheme, for a refund of standard-rate VAT paid on supplies purchased in the course of the construction works. By section 35 of the Value Added Tax Act 1994, the scheme applied to the construction of buildings designed as dwellings and permitted the person carrying out the works to obtain a VAT refund on building materials that were incorporated into the building or its site.
The appellant’s application was refused so far as it related to, inter alia, works to the swimming pool. The respondents took the view that, since the pool was an outdoor pool, it did not form part of the “building designed as a dwelling” within section 35(1A). The appellant appealed.
Held: The appeal was dismissed.
The pool did not form part of the building or its site. So far as goods were supplied in connection with the construction of the pool, they were not supplied for the purposes of the construction of a building designed as a dwelling within section 35(1A). Even if the pool had in some way formed part of the building, that would mean that the supply of services should have been zero-rated; since no VAT should have been charged in the first place, there could be no refund under section 35. The appropriate course was for the appellant to seek a VAT refund from the supplier, which in turn should claim a VAT refund from HM Revenue & Customs (HMRC). However, the tribunal’s decision did not bind HMRC to make such a refund because the decision was made on the basis of the evidence before it in proceedings to which the supplier was not a party; it was possible that the supplier might have evidence that would lead to a different conclusion.
The appellant appeared in person; Christiaan Zwart (instructed by the legal department of HM Revenue & Customs) appeared for the respondents.
Sally Dobson, barrister
