Hardy
| Jurisdiction | UK Non-devolved |
| Judgment Date | 01 November 1994 |
| Date | 01 November 1994 |
| Court | Value Added Tax Tribunal |
VAT Tribunal
The following cases were referred to in the decision:
Arbib VAT(LON/92/1740) No. 11,486; [1995] BVC 598
Batey (HMIT) v Wakefield TAX(1981) 55 TC 550
Lee VAT(LON/92/980) No. 10,662; [1994] BVC 1336
Lewis (HMIT) v Lady Rook TAX[1992] BTC 102
MKM Builders VAT(LON/92/2421) No. 10,511; [1993] BVC 1029
Orme VAT(LON/92/1885) No. 9975; [1993] BVC 1533
Pepper (HMIT) v Hart TAX[1992] BTC 591
Whiteley VAT(LON/92/2979) No. 11,292; [1995] BVC 551
Zero-rating - Alteration to listed building - Whether alteration to building physically separated from main building qualified for zero-rating - Value Added Tax Act 1983, Sch. 5, Grp. 8A.
The issue was whether an alteration to a building physically detached from a listed building but within the grounds of that building qualified for zero-rating as an approved alteration to a protected building.
The appellant was the owner and occupier of Car Colston Hall ("the Hall") which was a protected building. The commissioners ruled that certain building works carried out on the School Room, a building physically detached from but within the grounds of the Hall, did not qualify for zero-rating as an approved alteration to a protected building under Grp. 8A, Sch. 5 to the Value Added Tax Act 1983 because it was separated from the Hall by a drive 18 ft wide and was therefore not an integral part of the main house.
The Hall was a listed building which was erected about 1840 and which was purchased by the appellant's family in 1946. It had since been occupied by the family as its principal private residence. The School Room consisted of a number of rooms which was used for functions, such as parties and dances, by the appellant's family and also to serve lunches to families and friends, there being a small kitchen available to prepare food. The School Room also included a games room and play area which was used by the children of the family.
The appellant obtained planning permission to demolish a wooden structure which was attached to the School Room and to erect in its place a brick building. Permission was granted and the new extension was built in 1993 and now formed a billiard room within the School Room.
The appellant maintained that it was necessary to cross an 18 ft drive to get to the billiard room was no different from having to walk up a flight of stairs to gain access to a room within the main house. The School Room and the Hall as a single entity constituted the dwelling and accordingly the extension to the School Room fell to be zero-rated.
The commissioners contended that eligibility for zero-rating for approved alterations to listed buildings was restricted to work done to the protected building itself. Zero-rating did not extend to a listed building within the curtilage of the protected building unless the listed building became a protected building, a dwelling, or another qualifying building.
Held, allowing the appeal:
The School Room was within the curtilage of and appurtenant to the Hall so as to be a part of the entity which together with the Hall constituted a building designed to remain as a dwelling. Accordingly the School Room and the Hall formed one dwelling which was a protected building.
[The tribunal set out the facts summarised above and continued as follows.]
Before setting out his various submissions, Mr C R Tailby of Messrs Price Waterhouse, for Mr Forman Hardy [the appellant], dealt with a point arising from the statement of case. By para. 9 thereof, the commissioners contend that,
in accordance with Note (6A) to Grp. 8A of Sch. 5 to the Value Added Tax Act 1983, eligibility for zero-rating as approved alterations is restricted to work done to the protected building itself. The zero-rating does not extend to a listed building within the curtilage of the protected building unless the listed building, as a consequence of the work carried out, becomes a protected building, a dwelling, or another qualifying building
.
Mr Tailby observed of that claim that Note (6A) [to the Value Added Tax Act 1983] is inapplicable in the present case because a building, i.e. a new building, has not been constructed; the existing building has merely been altered. (I entirely agree with Mr Tailby's observation in that behalf, and consequently make no further reference to Note (6A) in this decision).
Mr Tailby then turned to his main claim: that the extension of the School Room is an approved alteration of a protected building in that the School Room remains a dwelling after completion of the building works. He acknowledged that the success of his submission in that behalf depended upon the tribunal accepting that "a dwelling" in Note (1) to Grp. 8A [of Sch. 5 to the Value Added Tax Act 1983] can, and in the present case does, include more than one building. That, he said, had been accepted in a capital gains tax context (see in particular Batey (HMIT) v Wakefield TAX(1981) 55 TC 550 andLewis (HMIT) v Lady Rook TAX[1992] BTC 102), and there appeared to be no reason why it should not also be accepted in the present one.
He pointed out that "dwelling" is an ordinary English word normally taken as meaning a place where somebody lives or inhabits. That meaning he derived from the Oxford English Dictionary definition of "dwelling" as "a place of residence; a dwelling place, habitation, house". Use of "dwelling" in the singular in the VAT legislation does not, and should not, he submitted, restrict consideration to one building, but can encompass several buildings, provided all of them together constitute "a dwelling".
It was the case for Mr Forman Hardy that the School Room functions as part of the family house, just as it did before the new extension was built. Consequently, it "remains" a dwelling. Mr Tailby contrasted that situation with the facts of other tribunal cases in which the...
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