Boxmoor Construction Limited (â€œBoxmoorâ€) appealed to the Upper Tribunal regarding the first-Tier Tribunals decision to standard-rate supplies of construction services made by the business. This decision was made on the basis that they were not supplied in the course of construction of a new dwelling, and were therefore not chargeable at the zero-rate of VAT, but rather related to the alteration to an existing building. Works of this nature attract the standard rate of UK VAT. Boxmoor was appointed as a contractor to undertake works in accordance with a planning consent that was in place. These works included the demolition of a whole house, save for brickwork underneath a ground floor bay window, and some further brickwork in the corner of the property that extended up to the first floor. After the demolition had been completed, a new residential property was constructed on the site incorporating the brickwork left during the demolition. HMRC, and later the First-Tier Tribunal, formed the view that these works failed to qualify as the construction of a dwelling but rather amounted to amendments being made to an existing building. As the retention of the brickwork was not a specific condition of the planning consent for the works (which would have allowed the construction to be zero-rated as the construction of a new dwelling), the works undertaken were treated as alternations to an existing building and therefore Boxmoor's appeal to the Upper Tribunal was rejected. If you are involved in either the construction or renovation of a residential property, establishing the VAT treatment of the works being undertaken at the earliest opportunity can save substantial amounts of money. If you require any advice on the VAT implications of buildings works, please speak to one of our experienced VAT consultants on our free VAT helpline.
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