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