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Information Sheet 2/14, January 2014

What is this information sheet about?

This Information Sheet provides guidance on the application of the zero-rate for VAT on buildings that are designed as a dwelling or dwellings (meeting the conditions of VATA 1994 Sch 8 Group 5 Note 2) and are intended for use as a building used for a relevant residential purpose (RRP) (meeting the conditions of VATA 1994 Sch 8 Group 5 Note 4).

This Information Sheet updates the relevant sections of Notice 708 and Manual VCONST.

Can a relevant residential purpose building also be treated as dwellings?

For the vast majority of buildings potentially eligible for zero-rating, you will know from the outset whether you are constructing or purchasing a new building that is designed as a dwelling or is intended to be used solely for a relevant residential purpose (RRP). However, since the zero-rate for dwellings is based on the design of the building and for RRPs based upon its use, HMRC