Commissioners of Customs and Excise v ZIELISKI BAKER & PARTNERS Ltd sub nom ZIELINSKI BAKER & PARTNERS Ltd v Commissioners of Customs and Excise
| Jurisdiction | UK Non-devolved |
| Judgment Date | 04 July 2000 |
| Date | 04 July 2000 |
| Court | Value Added Tax Tribunal |
VAT Tribunal
The following cases were referred to in the decision:
Barrell v Fordree ELR[1932] AC 676
Batey v Wakefield UNK[1982] 1 All ER 61
Ford VATNo. 16,271; [2000] BVC 4028
Hardy VATNo. 12,776; [1996] BVC 2057
Lewis v Lady Rook TAX[1992] BTC 102
Mann VATNo. 14,004; [1996] BVC 4273
Morfee VATNo. 13,816; [1996] BVC 2635
Orme VATNo. 9975; [1993] BVC 1533
Powell v Cleland [1848] 1 KB 262
R v Home Secretary, ex parte Crew [1982] SMM AR 94
R v Wimbledon Justices, ex parte Derwent ELR[1953] 1 QB 380
Whiteley VATNo. 11,292; [1995] BVC 551
Williams v Merrylees TAX[1987] BTC 393
Zero-rating - Protected building - Conversion of outbuilding within curtilage of listed building into games and changing facilities and construction of adjoining indoor swimming pool - Outbuilding connected to main house by wall - Whether house and outbuilding together constituted "a building" - Whether work zero-rated - Value Added Tax Act 1994 schedule 8 group 6Value Added Tax Act 1994, Sch. 8, Grp. 6, Notes (1), (6) and (10).
The issue was whether the conversion of an outbuilding, which lay within the curtilage of a listed building, into games and changing facilities and the construction of an adjoining indoor swimming pool was zero-rated as services supplied in the course of an approved alteration of a protected building.
The appellants were a firm of planning and development consultants, building surveyors and project managers. In 1994-95, they were instructed by the owners of The Mere to prepare and oversee a scheme for a major development within the grounds of the Mere House ("the House"), a Grade II listed building. The latter had been built in 1830 as the dower house for a much larger estate and was attached to the outbuildings, which were the subject of the appeal, by a wall nine-feet high and 15-feet long which had been built at the same time as the house and of the same materials. It had no structural, as opposed to aesthetic, purpose. The outbuilding, which was also built at the same time as the house, had previously been used as a tack room for the family's horses. Because the house was a listed building and the outbuilding was within its curtilage, listed building consent was necessary for the proposed works. On 30 August 1995, consent was given for the "construction of indoor swimming pool and conversion of existing barn into changing and games facilities together with detached garage". On 9 September 1997, Customs issued an assessment for tax, the disputed element of which was based on their ruling that the construction work was standard-rated.
The appellants contended the two buildings should be treated together as a protected building because:
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(2) the definition of listed building in the Planning (Listed Buildings and Conservation Areas) Act 1990 ("the 1990 act") was "any object or structure within the curtilage of the building which though not fixed to the building, forms part of the land and has done so since before 1 July 1948"; and
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(3) the buildings were physically connected by the linking wall.
This accorded with the purpose of Value Added Tax Act 1994, Sch. 8, Grp. 6, which was to provide relief to listed home owners. It would be contrary to the intention and purpose of Parliament if zero-rating was denied to structures within the curtilage of a listed building.
The commissioners contended that the outbuilding could not be bought within the definition of a protected building because that definition clearly attached to the house. "A" protected building could not refer to more than a single building. There was a three-stage test to be adopted, of which the first was to ask whether the outbuilding was "a protected building". If so, the second stage was to ask whether it was to remain as, or become, a dwelling or a number of dwellings after the work of reconstruction or alterations. Only if the answer to that was affirmative, the third question was whether it was a listed building. This case fell at the first stage, since to constitute "a building" the two would have to be physically or structurally one, which they were not.
Held, allowing the taxpayers' appeal:
1. Since the wall was ornamental and served no structural purpose, it did not provide the wherewithal to render the outbuilding "integral to the main house in structure". Thus, the barn and the outbuildings were, within the context of the legislation, two separate and free-standing structures.
2. There was no authority or rule of construction to support the three-stage test of a protected building put forward by the commissioners. The financial burden which Parliament intended to lift from the owners of listed buildings extended to work carried out on the structures within the curtilage of the listed structure and it defied common sense to allow relief only on the structure itself. The correct approach was to take the totality of the definition contained in Value Added Tax Act 1994, Sch. 8, Grp. 6, Note (1) and apply it as a whole.
3. It was conceded that the work had been in the course of an approved alteration to a building and, given that the structure formed part of the land within the curtilage of the listed building and had done so since 1 July 1948, it was included in that the definition of listed, and so protected, building and it was immaterial that the two were physically separated.
4. The appellants' concession, adopted by the commissioners, that there had to be some integration between the buildings was difficult to understand, given the provision in the 1990 Act that structures not fixed to the building were treated as being part of...
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