Holiday cottage does not qualify for VAT repayment under DIY housebuilders scheme

The current costs of house builds are incredibly high with building costs still rising. Pressure is therefore placed on the DIY housebuilders scheme which allows private individuals to claim back the VAT on the building materials used in constructing their own homes. With the staycation industry booming some may think that using this scheme in constructing a holiday home would be a wise move. However the recent case of Philip Spani (TC8916) has shown it cannot be applied to ventures such as furnished holiday lets (FHL).

Analysis of planning permission

Mr Spani obtained planning permission to build a new house on two floors in Seaford in the South Downs Country Park. The planning consent approved the construction but clearly stated that it could only be used as holiday accommodation and must be available as such for at least 140 days each year – quite a serious restriction....