MKM Builders
| Jurisdiction | UK Non-devolved |
| Judgment Date | 20 May 1993 |
| Date | 20 May 1993 |
| Court | Value Added Tax Tribunal |
VAT Tribunal
The following cases were referred to in the decision:
Hollier (LON/87/456) No. 3758; VAT(1989) 4 BVC 665
K & G Levell VAT(LON/89/896) No. 6202; [1991] BVC 774
Orme VAT(LON/92/1885) No. 9975; [1993] BVC 1533
Zero-rating - Listed barn in grounds of listed house - Approved alteration to barn to provide music room with store above - Whether alteration of protected building - Whether barn part of dwelling - Value Added Tax Act 1983 schedule 5 group 8A schedule 5 group 8AValue Added Tax Act 1983, Sch. 5, Grp. 8A, item 2 and Note (1).
The issue was whether a listed barn standing in the grounds of a dwelling house, which was itself separately listed, was to be treated as part of the house so that an approved alteration carried out at the barn to convert it into a music room with a store above amounted to an approved alteration of a protected building, with the consequence that supplies made in the course thereof were entitled to zero-rating.
One of the conditions of the listed building consent granted in February 1991 to W, who owned and occupied the house and the barn, was that the barn was only to be used in conjunction with the dwelling house, this being to prevent the premises from being used as a separate unit of residential accommodation. The alterations included demolishing a lean-to shed, raising the roof by 900mm and putting in four new windows, including two for the upper floor, instead of the two small windows in the existing building. There were internal stairs.
The appellants zero-rated the work and the commissioners raised an assessment for the amount of tax allegedly due on the supplies.
The appellants based their case on Value Added Tax Act 1983 section 1 subsec-or-para (5)sec. 1(5) of the Planning (Listed Buildings and Conservation Areas) Act 1990 which provided that any structure within the curtilage of a building which had formed part of the land since before 1 July 1948 was to be treated as part of the building. Accepting that the barn was not a "protected building" so as to be entitled to zero-rating, since it was not "designed to remain as or become a dwelling … after the … alteration", they contended that as it lay in the grounds of a listed dwelling, the whole to be construed as a single building which was a dwelling by virtue ofValue Added Tax Act 1983 section 1 subsec-or-para (5)sec. 1(5), there had been an alteration to a listed building which, as a dwelling, was a protected building. Consequently, the work carried out was entitled to zero-rating. Further, the planning conditions required the building to be used only as an adjunct to the existing dwelling so that it became an annexe to it and part thereof.
The commissioners contended that the work done was to change the building from being a barn to being a music room and a store room and resulted in it continuing to be a separate building but not a dwelling. To be a protected building it had both to be a listed building and a dwelling, but the planning conditions required that the barn, as altered, was not to be used as a dwelling. As it was not a protected building there was no entitlement to zero-rating.
Held, dismissing the taxpayers' appeal:
1. As the barn was listed in its own right, Value Added Tax Act 1983 section 1 subsec-or-para (5)sec. 1(5) of the Planning Act was not required to make the barn part of a listed building. It was not a "dwelling" and therefore not a protected building.
2. What the VAT legislation imported from the Planning Act was the means to determine what was a...
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