VAT & Multiple Building Dwellings
HMRC has recently changed their interpretation of the VAT treatment of dwellings that have been formed from either the construction of new buildings, or from the conversion of non-residential buildings into a dwelling. HMRC had previously considered that whilst a building could contain more than one dwelling, a dwelling could not be formed from more than one building.
However, following a recent tribunal case, HMRC now accept that single dwellings can be formed from more than one building.
As a result:
1. The construction of dwellings formed from more than one building can be eligible for zero-rating.
2. The reduced 5% rate of VAT can apply to conversion of premises consisting of more than one building into a dwelling, for example, where they are converted to a different residential use.
Anyone who has previously constructed or converted eligible buildings into dwellings consisting of more than one building but wasn’t treated as zero rated for VAT purposes can now submit a claim for overpaid VAT.
If you think you may be eligible for a claim please contact Una McKearney in our tax department on 028 8775 2990 or Una.McKearney@cavanaghkelly.com
Whilst every effort has been made by CavanaghKelly to ensure the accuracy of the information here, it cannot be guaranteed and neither CavanaghKelly nor any related entity shall have liability to any person who relies on the information herein. Information given here is for guidance only. Detailed professional advice should be taken before acting on any information contained herein. If having read the guidance here, you would like to discuss further; a member of our team would be pleased to help you.