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A ‘Pirate Island’ is not a dwelling!

8th Feb 2017
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Do not tell me VAT is boring! The Tribunal considered a case where a Mr Challis spent £1m on construction of a pirate island for his family’s recreational use. It included The Black Doubleton, Coffee Cabin, Lubbers Locker, Dead Man’s Deck, and Gibbet Gate. He argued that the structures should be zero rated as the construction of a new dwelling.

The Planning Consent was retrospective, but also did not give consent for habitation or renting out of the recreational buildings.

The Tribunal was very charitable in carefully working through the legislation and case law. Apparently HMRC had verbally advised that the development was unusual, and therefore its VAT liability was complex. I disagree! It did not constitute a dwelling, in whole or part, therefore its construction must revert to the standard rate.

Read the decision here: http://financeandtax.decisions.tribunals.gov.uk//Aspx/view.aspx?id=9597

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