Readers' forum: One house or two?

permission to demolish the existing building and replace it with a new three-bedroom house about 50 yards away. His intention is to build the second house and move into it at which point the original one will be demolished.

My concern relates to VAT: will builder services for the new house be zero-rated as a new dwelling or is there a problem because the site will start and finish with only one dwelling – in other words no extra dwellings are being created? And if he buys materials without services will he be able to recover the VAT on these goods through HMRC’s DIY scheme?

Query 19 268– Southfork Man.

Reply by Gardener

The number of dwellings is not relevant to a new construction.

HMRC’s guidance in VAT Notice 708 can be confusing because it puts next to each other distinct types of supply...