188ÌåÓý

In order to qualify for the reduced rate, a residential conversion must result in a change in the number of single household dwellings - for example, where a non-self-contained dwelling is converted into a self-contained one.

The reduced rate is also applicable where a single household dwelling that has been empty for at least two years is renovated or altered

What ‘single household dwelling� means

A ‘single household dwelling� is defined in Value Added Tax Act 1994, Schedule 7A, Group 6, paragraph 4 of the Notes.

What ‘designed for occupation by a single household� means

What is meant here is that all the elements of living (that is, washing, cooking and toilet facilities with space for eating, resting and sleeping) are situated in a discrete area for occupation by a single household. An example of a single household dwelling would be the typical family home, whether flat or house. For example a single household can be a single person, a family or students who join together as if they were a family.

This contrasts with a ‘multiple occupancy dwelling� (VCONST14500), where the living space, to varying degrees, is shared between separate households.

A dwelling is ‘designed� for a single household if it was built for that purpose (and not altered to something different - for example, offices) or has been altered to that purpose from some other use - for example, a barn.

Conditions

VCONST14120, VCONST14130 and VCONST14140 apply in the same way as they do for buildings ‘designed as a dwelling or number of dwellings�.

If the conditions aren’t met before the conversion works begin but can be met after works are completed, the reduced rate will apply.

An example of non-self contained accommodation is a bedsit where some of the elements of living are shared with other bedsits.

In Piers Minoprio (VTD 17806) the appellant argued that works to his dwelling weren’t works to a single household dwelling (because it wasn’t self-contained) but resulted in a single household dwelling after the work (because it became self-contained), and was therefore eligible for reduced-rating. The Tribunal found that the dwelling (an upstairs flat which didn’t have its own independent access because the lobby from which the stairs led also served a coach house and stables) was a self-contained dwelling both before and after the works were carried out:

In order to access the flat from the outside it was necessary to go through the lobby, the main door being to the yard� [The Appellant] relied on the fact that between the lobby and the staircase there was only a glazed partition and a timber door with a lock that was not working�

We find as a fact that the first-floor dwelling was self-contained. We accept [HMRC’s] submission that the type of door was not relevant. Nor could the question whether the flat was self-contained depend on whether the key was lost or the lock broken.