New queries, issue 4331

Big bungalow

I have a client who is a builder and he had a large contract to provide building services constructing a new bungalow on land owned by a farmer. The bungalow is on its own plot of land adjacent to the farmhouse and will be lived in by the farmer’s mother-in-law even though it is owned by the farmer and his wife.

The mother-in-law used to live in the main farmhouse with the farmer and his wife but they argued too much – hence the need for the new bungalow.

My client zero-rated his building services to the farmer because he was building a new dwelling from bare land but HMRC are now trying to assess VAT against my client because apparently the bungalow cannot be sold separately from the main farmhouse.

This...