Capable of functioning separately

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Note 17(a) to zero rate Group 5 provides this as one condition in relation to a qualifying annexe. The construction of a qualifying annexe is zero rated.

The Note reads: “(a)     the annexe is capable of functioning independently from the existing building; and … ”

HMRC have increasingly argued for separate services to be present for an annexe to he treated as a qualifying annexe.

This FTT decision is more practical, in that, although there was no separate central heating system, there were separate heating controls:

After practical completion of the works a decision was taken to move the Hall boiler to the Hall itself, and it was cheaper to have new kit installed in the Hall kitchen, with the work performed by a contractor different from the main works contractor.  Taking the position as at practical completion, I am satisfied that the fact that users of the Hall could control the temperature in the Hall from the Hall (ie without accessing the main church building) is sufficient to constitute a heating system that functions separately from the main church building

About Les Howard


Hi, I am a VAT Consultant, working mainly with charities. I am based in Cambridgeshire

I have over 20 years experience in VAT, and am currently also a part-time member of the Tax Tribunals.


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