The building project would not be 'renovation' and the existing flats would not be 'empty' ......so maybe your starting premise is incorrect?
The existing flats would all be occupied while the new apartments are built on the flat roof above. So we are talking about new build which is normally VAT exempt.......I am just concerned about whether HMRC would view this project as new build or........is there any possibility that they would say it is an 'extension' as the new properties are to be accessed via the existing front doors and stairs within the building (albeit the stairs will need to be extended up to the newly created flats)
I meant zero rated rather than exempt!
If you construct a new building you will normally have to charge VAT at the standard rate. You may, however, be able to zero-rate your supply if you are involved in constructing a qualifying building. A qualifying building can be:
If you look at 14.2 does it not cater for the circumstances that I have described .......new self contained dwellings?