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Sam, Accountant
Category: Tax
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Work/live unit converted with planning to 2 units hmrc have

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Work/live unit converted with planning to 2 units
hmrc have declined
I have their letter,can you please help
Thanks for your post - can you expand on the actual post as it makes no sense
Customer: replied 2 years ago.
Good afternoon Sam
I can email you copy of plans ,planning permission and hmrc letter
Could you please give me your email
Thank you
They will need to be copy and pasted onto this Q & A format as we are unbale to liaise directly with clients we help via Just Answer
Customer: replied 2 years ago.

Hi Sam,

Below is the HM revenue letter

HM Revenue






HM Revenue & Gustoms

VAT Registration Service

Crown House

Birch Street


West Midlands

\ ru1 4JX

Tel 03000 523240

Lines open Mon to Fri 08.00 to 17.00

Fax 03000 54630 7 t 03000 ilsdtz

.Date: 22 July 2015

Our Ref: 222|4LCDRJT4I1IVRKR

Team: BS8

www. g ov. u k/b u s i n ess -tax/vat

Dear Sir or Madam

Thank you for your recent application to register for VAT.

We are unable to proceed with your VAT registration application because

The relevant law for zero rating the first grant of a major interest in a converted property can be

found in the VAT Act 1994 Schedule I Group 5:-

"The first grant by a person:

(a) ... .

(b) converting a non-residential or a non-residential part of a building into a building designed as a

dwelling or a number of dwellings .. . ..

of a major interest, or in any part of the site.

The development does not meet the conditions of the above legislation i.e. it does not meet the

basic conditions for the first grant to be zero-rated as the building is not the subject of a nonresidential

conversion (VAT Notice 708 Buildings and Construction sections 5.3 and 5.3.1 refer).

From the information provided by yourselves and information on the Wandsworth Council

Planning site it appears that neither of the dwellings will be wholly contained within the former

non-residential part of the property (i.e. they both utilise former living accommodation). To qualify

for zero-rating the conversion must use only non-residential parts of the building (Section 5.3.5 of

Notice 708 refers).

For information and access to online seminars that are relevant to VAT please use this link:


You are therefore ineligible for VAT registration as you are not making or intending to make a

taxable supply as the sale of the property will be exempt from VAT.

VAT Notice 708 Buildings and Construction can be accessed via HMRC's website

www. g ov. u k/busi ness -taxl v atl .

Please advise us promptly if your circumstances change and you start to make taxable supplies

or the value of your taxable supplies exceeds the registration threshold.

lf you do not tell us at the right time, you may have to account for tax you have not collected and

also incur a financial penalty. You should be aware that you are required to account for and pay

any VAT due from the date you are liable to be registered, not just from the date you apply for

registration or from when you receive your certificate.

lf you have any further information that you would like us to consider, please send it within 30

days of the date of this letter.

lf you do not agree with my decision, you can:

ask for my decision to be reviewed by an HMRC officer not previously involved in the matter, or

appeal to an independent tribunal.

Should you require an lndependent Review of this decision, you will need to make a written

request as per the instructions below. Any such request must clearly state that you wish the

decision to be reviewed by an HMRC Officer not previously inVolved in the matter.

lf you opt for a review you can still appeal to the tribunal after the review has finished.

!f you want a review, write to the team noted at the end of this letter. Send your request to HMRC,

VAT Registration Unit, Crown House, Birch Street, Wolverhampton, WV1 4JX within 30 days of

the date of this letter, giving the reasons why you do not agree with the decision.

We will not take any action to collect the disputed tax while the review of the decision is being

carried out.

lf you want to appeal to a tribunal you should send them your appeal within 30 days of the date of

this letter.

Further information about appeals and reviews can be found on the HMRC website with/appeals.htm or you can contact us by telephone using the

number on this letter.

You can find out more about tribunals by contacting the Tribunals Service on 0845 223 8080.

Further information is available on the Tribunals Service website .

Yours faithfully

o t-\ \

Registration Team BS8

HM Revenue & Customs

For information and access to online seminars that are relevant to VAT please use this link:

Customer: replied 2 years ago.

Hi Sam,

I shall also copy in the planning permission and plans. in my next response

Customer: replied 2 years ago.

 Hi Sam,

Unfortunately I am unable to paste in the other documents I have. Would it be possible to have an email so that I can forward the documents.

many thanks,


I am afraid we do not have the capacity to read/respond to emails ad I do not need the planning permission details I am a Tax adviser not a surveyor to pass judgement or comment in relation to the VAT registration refusal.
But before I can proceed, please explain more about the units - and why you thought they might qualify for VAT registration, which I assume was in the basis that you could get the conversion VAT costs refunded.
The response from HMRC seems accurate to me with respect to the residential side of matters that to qualify for zero-rating the conversion must only use non-residential parts of the building.
However I do note the correspondence from the council suggests these were offices prior to the conversion, Do you now how these were registered with the land registry office?
Is this not the case then?
OR were there other residential living space within this area of conversion ?
Customer: replied 2 years ago.

Hi Sam,

Please give me a couple to days to find additional information with regards ***** ***** use.

many thanks,


Thanks for letting me know and that's great
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