In CMJ (Aberdeen) Ltd v HMRC [2021] TC8140 the First Tier Tribunal (FTT) dismissed an appeal against assesments to standard-rate the supply of a new build dwelling. It could not be zero-rated as it did not have valid planning consent when the construction works commenced.

CMJ (Aberdeen) Ltd (CMJ) was a construction company which built a new property in Scotland and Zero-rated the supply:

The FTT, dismissing the appeal, found:

A cautious tale for builders who already had to navigate a long list of VAT rules and regulations even before the recent introduction of the CIS: Construction Industry reverse charge. Local authorities may accept planning applications after the fact but HMRC will not as this is not within the VAT rules for zero rating.

Useful guides on this topic

Land & Property VAT (Subscriber guide)
An outline of the VAT treatment of some of the more common supplies of land and property.

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

Land & Property: Relevant residential & relevant charitable purpose
What are the VAT rules for land and property that is used for a relevant residential purpose or a relevant charitable purpose? What are the claw back provisions affecting change of ownership or use?

Land & Property: 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.

How to appeal an HMRC decision
Disagree with a HMRC decision? How to appeal, what type of decision can you appeal, what are your different options when you disagree with HMRC? What are the key steps in making an appeal?

Correcting VAT errors
What are the VAT error correction time limits? Can you correct errors through the VAT return? Do you have to notify HMRC?

External link

CMJ (Aberdeen) Ltd v HMRC [2021] TC8140


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