In Taylor Wimpey PLC v HMRC [2018] UKUT 55, the Upper Tribunal (UT) concluded that the majority of the kitchen goods included in houses sold were subject to the ‘Builder’s block’ on recoverable VAT.

Property developers are not able to recover VAT on goods other than building materials, that are incorporated or installed as fittings in a dwelling which will be subject to a zero-rated First grant of a major interest. This is under the ‘Builders’ Block’.

This case involved a Fleming Repayment claim in excess of £50million by Taylor Wimpey with respect to VAT on:

Taylor Wimpey claimed:

The First-Tier Tribunal (FTT) original found that no VAT was recoverable. The UT’s first hearing provided guidance on how to interpret the terms ‘incorporates’, ‘installed as a fitting’, and concluded that the Block was not unlawful.

The UT left it to HMRC and Taylor Wimpey to use the guidance to agree what the correct position was for each item. They could not agree so the case was resubmitted to the UT to help conclude.

The four issues the UT looked at in this appeal were:

The UT decided as follows:

To the extent that the appeal related to extractor hoods between 1 January 1982 and 1 June 1984 it was allowed. The appeal relating to the rest of the claim was dismissed.

Links

Reclaims and unjust enrichment

Land & Property VAT (notes)

Land & Property VAT at a glance

External link Taylor Wimpey PLC v HMRC [2018] UKUT 55