VAT refund on new build

Here is the scenario...

Planning permission was granted for a new dwelling in the front garden of an existng one. The plans that were submitted to the council showed 'conversion' of the old garage but in reality this was demolished to the slab and replaced on the same footprint.  This was the intention from the outset and the word 'replacement' rather than 'conversion' should have been used on the planning applicaiton.  Hind-sight is a wonderful thing!

The old garage slab now happens to the the living room of the new property.

HMRC have refused the application for a vat refund using the argument that the building is unlawful - it did not follow the planning consent as the garage was demolished rather than converted.  They state that this does not therefore meet the requirements of para 12 of VAT431NB and VAT act 1994 Sch 8 Group 5 Note 2(d).

We have photographic evidence that the building was completely demolished if we can persuade HMRC that the building is lawful (it passed building regs and has a completion certificate!)

Any recomendations on the method of appeal would be much appreciated.

If you know of any previous cases that have been passed on this basis, a link would also be much appreciated.

Comments
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Since when are HMRC arbiter of planning regs?

Hansa |
Hansa's picture

The First-tier Tribunal (Tax)

shaun king |

Thank you both for your time

Katie Anning |

A hard line is taken by HMRC

uktaxpal |

A hard line is taken by HMRC

uktaxpal |