High Court Makes Parental Order in Respect of Baby Boy
When a child is born via a surrogacy arrangement, the legal parents are the surrogate mother and, if they have consented to the arrangement, her spouse or civil partner. The...
Continue readingYou may understandably feel overawed by the might of the tax authorities but, with the law on your side, the balance of power is far more even than you might think. In a case on point, a couple struck an important blow for the cohort of determined people who set about building their own homes.
The couple demolished a wooden bungalow on their land and embarked on an epic project to construct a new home for themselves. They lived in a caravan whilst the work was ongoing. Although the man, a jobbing builder, had for five years devoted his weekends and holidays to working on the project, it remained incomplete.
They availed themselves of the DIY Builder Scheme, which enables those who build their own homes to reclaim VAT on construction materials, and HM Revenue and Customs (HMRC) duly repaid them £5,182. However, when they made a further claim under the scheme, it was roundly rejected.
HMRC asserted that, on a true interpretation of Section 35 of the Value Added Tax Act 1994, DIY builders can only make a single claim for repayment of VAT in respect of any one building. They contended that such claims can only be made in a three-month window following a building’s completion. According to HMRC, the earlier VAT repayment should not have been made as the couple’s home was incomplete.
In challenging HMRC’s stance, the couple pointed out that self-build projects often take years. Most self-builders only ever build one house and would be discouraged from doing so if they were barred from making periodical reclaims of VAT whilst works are in progress. It cannot have been Parliament’s intention to expose self-builders to the hardship of only being able to make one repayment claim, post completion.
Upholding the couple’s appeal, the First-tier Tribunal (FTT) fundamentally disagreed with HMRC’s interpretation of Section 35. On a proper reading of the provision, it did permit more than one repayment claim to be made under the scheme. There was also no statutory requirement that evidence of a building’s completion must be provided before a repayment claim can be accepted.
Insofar as the Value Added Tax Regulations 1995 were incompatible with the FTT’s interpretation of the statutory provisions, they were unlawful, having been made in excess of power. The FTT concluded that the Regulations went entirely too far in restricting self-builders to making a single repayment claim only after a building is completed. The three-month post-completion deadline represented not a window, but an outer limit during which valid repayment claims can be made.