What is a “building” for VAT purposes?
Earlier this year the Tribunal ruled that the construction of a skate park by a charity for relevant charitable use was nonetheless standard rated as the skate park was not a “building”. The Tribunal was extremely supportive of the charity’s aims but it could not do anything about the wording of the law. The relevant provisions refer to the zero-rating of services supplied in the construction of a “building”. In the absence of a further definition, words in statutes must be given their everyday meaning as far as possible. Therefore the Tribunal concluded that “building” was not merely something that had been built but it must also provide some sort of shelter or accommodation in accordance with the dictionary definitions of “building”. According to these definitions, the skate park was not a building.
The same principle was shown by a case involving a floating house. This appeal was brought by an architect who had constructed his own house on a floating platform that was permanently attached to the riverbank. He wished to claim the VAT on the materials used in the construction under what is known as the Do-It-Yourself Housebuilders Scheme. Unfortunately, the relevant law refers to the construction of a “building”. “Building” excludes a houseboat and the Tribunal did not consider that the permanent links to the shore made the floating structure into a building.
The whole subject of land and buildings is a complex and confusing area of VAT so if in doubt seek advice.