Correct rate for building work on empty house

The taxpayer initially claimed that building work carried out on a house should be zero rated on the basis that the property had been completely demolished and rebuilt with only a single façade retained. The legislation allows a single façade to be retained – or a double façade in the case of a corner plot – but only if the retention is a condition of planning consent or other statutory requirements (VATA 1994 Sch 8 Group 5 note 18). However other parts of the existing house were retained including the front slope of a roof and other structural and decorative elements. HMRC refused the claim so the taxpayer appealed.

The First-tier Tribunal agreed that there was no scope for zero rating so this part of the appeal was dismissed.

The taxpayer’s second argument was that even if zero rating did not apply ...