Previously, for the purposes of the zero-rate and reduced rate VAT relief, HMRC have considered that a dwelling cannot be made up of more than one building. However a new brief published by HMRC has confirmed that it is now accepted that a single dwelling can consist of more than one building, with the result that the construction of all of the buildings that form part of that dwelling will attract VAT at the zero-rate. This will have an effect on any business or individual involved in the provision of construction-conversion services and the onward supply of buildings that constitute a dwelling for these purposes. From a VAT perspective, this will allow for the construction of dwellings consisting of multiple buildings to be zero-rated provided certain conditions are met. Further to this, the reduced rate may also be applicable to the conversion of non-residential premises that consist of more than one buildings into a different number of dwellings. If this new interpretation of VAT law will affect you or one of your clients, please call our free VAT helpline to determine any impact that may be had on the business.

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