M Lennon & Co Ltd v Revenue & Customs [2015] UKFTT 296 (TC) (23 June 2015)

M Lennon & Co Ltd v Revenue & Customs [2015] UKFTT 296 (TC) (23 June 2015)

The property was not 'demolished completely to ground level' as required by Note 18(a) to Group 5, Schedule 8, VATA 1994, because half of the front façade was retained and it was not a party wall. Therefore, the works constituted reconstruction or alteration of an existing building, not new construction, and the sale was not zero-rated for VAT purposes. The Tribunal has no jurisdiction to grant relief on fairness or legitimate expectation grounds.

Citation
[2015] UKFTT 296 (TC)
Parties
Appellant: M Lennon & Co Ltd; Respondents: The Commissioners for Her Majesty’s Revenue & Customs
Jurisdiction
United Kingdom
Judgment Date
23 June 2015
Procedural Posture
VAT Appeal (first Tier Tribunal Tax) / Final Judgment
Outcome
Appeal dismissed
Legal Topics
VAT, Zero Rating, Construction of Buildings, Input Tax Recovery, Demolition Requirements
Tax Law VAT Zero Rating Construction of Buildings Input Tax Recovery Demolition Requirements

Case Brief

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Parties

M Lennon & Co Ltd

Appellant

The Commissioners for Her Majesty’s Revenue & Customs

Respondents

Procedural Posture

VAT Appeal (first Tier Tribunal Tax) / Final Judgment

Legal Issues

  1. 1 Whether the sale of the property qualified as a zero-rated supply under Group 5 of Schedule 8 VATA 1994
  2. 2 Whether the property was 'demolished completely to ground level' within the meaning of Note 18(a) to Group 5
  3. 3 Whether the requirements of Note 2(d) to Group 5 were satisfied in the absence of planning consent

Ratio Decidendi

The property was not 'demolished completely to ground level' as required by Note 18(a) to Group 5, Schedule 8, VATA 1994, because half of the front façade was retained and it was not a party wall. Therefore, the works constituted reconstruction or alteration of an existing building, not new construction, and the sale was not zero-rated for VAT purposes. The Tribunal has no jurisdiction to grant relief on fairness or legitimate expectation grounds.

Court Disposition

Appeal dismissed