Submission of more than one DIY scheme claim on new dwelling

The taxpayers started paying council tax on their new home in 2015 even though it was not completed. They still had major building work to do including work with bathrooms and kitchens. But they submitted a DIY claim for VAT paid to date in April 2017 which HMRC accepted and repaid. However HMRC rejected the taxpayers’ second claim submitted in 2019 on the basis that the legislation VATA 1994 s 35 permits only one claim. The department said s 35 contained clear references to ‘a claim’ and ‘the claim’ indicating only one claim can be made.

The taxpayers appealed.

VAT can be claimed on the cost of building materials purchased to construct a new dwelling which will become the main residence of the owner or a relative - a non-business project. A claim is made directly to HMRC under the DIY scheme within three...