In Edward Burrell v HMRC [2020] TC07766, First Tier Tribunal (FTT) found the construction of a houseboat did not meet the 'construction of a building designed as a dwelling' and therefore did not qualify for the DIY scheme.

  • In 1990, Mr Burrell obtained planning permission to construct a houseboat on a piece of land. A concrete foundation was laid onto the steel structure and a crane was then used to lift the structure before placing it on water, where it remains.
  • Mr Burrell then submitted a claim for a VAT refund of £4,140 under the VAT DIY Housebuilders Scheme.
  • HMRC refused the claim on the basis that the houseboat did not meet the definition of a building designed as a 'dwelling', for VAT purposes.
  • Mr Burrell argued that the houseboat was, in essence, a concrete-based home that is designed as a dwelling, consistent with the planning permission. A crane was used to lift the structure into the water, where it remains. Mr Burrell appealed to the FTT.

The FTT found that:

The planning permission specifically stated that “No permanent structures or buildings placed on the land are permitted”. This express prohibition in the planning permission meant the construction of the houseboat was not a 'dwelling' and therefore did not meet the DIY refund scheme.

The appeal was dismissed.


DIY Housebuilders Scheme
It is possible to recover VAT on constructing a new residential dwelling, or dwellings, even where there is no planned sale of the property. This recovery can arise under the special refund scheme for DIY housebuilders.

Land & Property: Dwellings
What is a dwelling for VAT purposes? What is the VAT treatment for construction, conversion, sale, and letting of a dwelling?

External links

Edward Burrell v HMRC [2020] TC07766