For DIY house builders to be able to recover input VAT from HMRC under Section 35 of the Value Added Tax Act 1994 several conditions must be fulfilled. For one thing statutory planning consent must have been granted and the building must have been constructed in accordance with that consent.
In the First-tier Tribunal (Tax Chamber) case of Akester v Revenue and Customs  the property had been constructed in accordance with the planning permission. However it was being used by the developer in contravention of a residency restriction in that consent at the time HMRC rejected the claim.
The developer had supplied two different dates as to when he occupied the property: the former, 25 March 2015 was in breach of the then planning condition while the latter, 8 October 2015 was after the removal of the condition that prohibited that occupation.
When HMRC refused the developer’s claim for repayment of VAT the requirements of Note 2(c) and (d) of Group 5 of Schedule 8 of the Value Added Tax Act 1994 had not been satisfied.
The legislative requirements were framed in mandatory terms: HMRC were allowed no discretion to accept anything less than a planning permission free of non qualifying residency restrictions, nor could HMRC extend the time limit.
This blog has been posted out of general interest. It does not replace the need to get bespoke legal advice in individual cases.