In Christopher Swales v HMRC [2019] TC07116, the First Tier Tribunal (FTT) allowed a VAT DIY Builder's Scheme refund. HMRC had refused the claim on the grounds that the building did not strictly comply with the approved planning application.

The conditions for claiming a VAT DIY refund for a new build are that: 

  • The building should be constructed from scratch and not incorporate an existing building.
  • Is it lawful, i.e. complies with the planning consent?
  • The dwelling must not be prohibited from separate use or disposal, in the terms of the planning consent.
  • A DIY Scheme reclaim must be submitted within three months of completion.

Mr Swales applied for permission to demolish a garden shed and erect a detached annexe. The permission was rejected but was subsequently obtained under a different planning permission. The shed was demolished, except for the concrete floor slab.

HMRC rejected his claim to a DIY refund because:

  • The shed’s concrete floor slab remained.
  • The building did not strictly comply with part of the approved planning application.

Mr Swales appealed HMRC’s decision to the FTT.

The appeal was allowed. The FTT criticised HMRC’s approach of assuming the role of the planning office and their threatening behaviour in respect of potential penalties without proper reason. 

The FTT referred to the case of Lady Henrietta Pearson. There it was found that in the absence of evidence that the planning authority insisted on strict compliance with the approved plans, the planning consent is to be taken broadly and not in every detail of the planning plans.


The decision demonstrates that persistence is sometimes required to overcome HMRC’s misconceptions of how to interpret land planning requirements in the context of tax law. This is especially so as it relates to the conditions claiming a VAT refund under the DIY Scheme.

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Christopher Swales v HMRC [2019] TC7116