Builders’ VAT

The taxpayer bought a house in a conservation area which was in a state of severe neglect. It was agreed with the council that the appellant should retain the existing front façade of the house but demolish the rest and build a new house behind the front wall.

At the same time as he applied for planning consent the taxpayer contacted HMRC to confirm that he would be entitled to a VAT refund under the DIY builders and converters scheme. He enclosed copies of the plans with his letter. HMRC confirmed that he would be so entitled.

On completion of the work which the taxpayer carried out largely by himself he submitted a claim for a VAT refund. HMRC refused the claim so the taxpayer appealed.

The issue for the tribunal concerned the front façade of the property....