Gregory Sewell v The Commissioners For HMRC
[2024] UKFTT 773 (TC)
Brian Lawton v The Commissioners for HMRC
7 October 2024
[2024] UKFTT 892 (TC)
First-tier Tribunal
A homeowner did DIY building work in two stages. He tried to claim VAT back for both, but the tax office only allowed the first claim because rules only let you claim once for building a house, not for adding to one that already exists. The court agreed with the tax office.
Key Facts
- •Brian Lawton (BL) appealed HMRC's refusal of a £2,582.38 VAT refund claim under the DIY Housebuilders VAT Refund Scheme.
- •BL completed a barn conversion in two phases: initial conversion and a later two-bedroom extension.
- •BL claimed VAT refunds for both phases separately.
- •HMRC allowed the first claim but refused the second, claiming only one claim per project is permissible and extensions to existing dwellings are ineligible for refunds.
- •BL argued that Covid-19 caused delays, forcing him to claim for the first phase separately and that HMRC incorrectly allowed the first claim as it was incomplete.
Legal Principles
Only a single VAT refund claim is allowed under the DIY Housebuilders Scheme, unless the initial claim was repaid in error.
VAT Brief 8 (2022)
Under VATA 1994, Section 35, a VAT refund is available for the construction of a dwelling, but not for extensions to existing dwellings.
Value Added Tax Act 1994 (VATA), Section 35
The First-tier Tribunal (FTT) lacks jurisdiction to consider public law issues, such as legitimate expectation, in appeals under section 83 VATA.
Hok Limited [2021] UKUT 383 (TCC), Noor [2013] UKUT 071, The Trustees of the BT Pension Scheme [2015] EWCA Civ 713
Outcomes
Appeal dismissed.
HMRC correctly allowed only one claim under the DIY scheme. The second claim was ineligible as it was for an extension to an existing dwelling, not the construction of a new dwelling. The FTT lacks jurisdiction to consider BL's claims related to legitimate expectation and the impact of the Covid-19 pandemic on his ability to complete his project.