VAT on Construction, Land and Property

Dave Wright, Tax and Accountancy Publisher

May 21, 2020

The latest release of VAT on Construction, Land and Property is now live for subscribers.

This is an interim, online-only, update, covering events and forthcoming changes as known at the end of April 2020. The next full update, Issue 84, is expected to appear in July.


I hope you and your families are keeping safe and well, and as busy as you would wish to be.

Many of the issues and initiatives of recent weeks are well-known, and of no particular relevance to this book, but I have covered specific points about:

  • Option to tax notifications (H3.2.3).
  • Lease variations, and rent-free periods (K12.1.2).
  • Time limits for submitting DIY claims (N23.7.5), and HMRC’s current processes for dealing with them (N23.10.4).
  • ‘Key worker’ use of RRP student accommodation, and the potential ‘change of use’ charge – a matter that HMRC say they are considering (P26.10.7, P27.8.4).


New material includes three Advocate General’s Opinions:

  • XT (aka Valstybinė mokesčių inspekcija) about a property joint venture (Box K33.2A).
  • Kaplan International Colleges, about the cost-sharing exemption (G9.3.2), but of more general interest on the implications of VAT-grouping (A4.4.4).
  • Stichting Schoonzicht (Box C10.9A) about whether a developer’s input tax was subject to the Capital Goods Scheme, or immediately adjustable under the equivalent of reg 108. I have added commentary on the difference between the two regimes in C10.1 and elsewhere.

I have also noted a new referral, Titanium Ltd, asking whether property ownership creates a ‘fixed establishment’ (B4.5.3).

UK case law

The Tribunals and Courts have been disrupted by recent events, but new case law, not all of it pre-lockdown, includes:

  • The Court of Appeal in Leisure, Independence, Friendship and Enablement Services Ltd and The Learning Centre (Romford) Ltd, of interest here on the subject of differences in VAT treatment between the countries of the UK (A1.4.3).
  • The Upper Tribunal in a partial exemption case, Royal Opera House Covent Garden Foundation (Box C6.3A).
  • The Upper Tribunal in Moulsdale, upholding the First-Tier decision on the ‘circularity’ issue with the anti-avoidance rules for the option to tax (Box H16.4A).
  • Two more First-Tier decisions, Proffitt and Wedgbury, about time limits for DIY claims (Box N23.7A).

Fortyseven Park Street (Box G26.12A) has been refused leave to appeal to the Supreme Court.

Other matters

HMRC have provided another new postal address for the option to tax unit (H3.2.3) and I have reflected this and other, minor, changes to Notice 742A.

I have covered the proposed requirement for larger businesses to notify instances of ‘uncertain tax treatment’ in A2.11 . This is currently subject to consultation, but is expected to apply from next year.

As usual, I have updated commentary on various other issues.


As always, I am grateful for information and comments from a number of people. My thanks go this time to:

Ali Anderson, Andrea Marshall, Dan Smith, Dave Brown, David Millar, Hui Ling McCarthy QC, Ian Fletcher, Julie Towers, Mark Peters, Michael Hunter, Michael Surry and Rachel Gauke.

Martin Scammell

May 2020