Margaret Elizabeth Wendels v Commissioners for Her Majesty's Revenue and Customs
Decision date: 8 June 2010
Neutral citation: [2010] UKFTT 476 (TC)
Overall AI summary confidence: high
Short overview
This short overview is intended to summarise the case, issues and outcome so far as they are supported by the judgment.
AI confidence in this short overview: high
Mrs Wendels appealed HMRC's refusal to refund VAT under the DIY Builders Scheme for a three-bedroom dwelling built on orchard land subject to a planning occupancy condition. The Tribunal held the planning condition was an occupancy restriction, not a prohibition on separate use or disposal under note 2(c) to group 5, Schedule 8, VAT Act 1994, and found the construction was a one-off private home build not carried out in the course or furtherance of a business. The appeal was allowed and HMRC reserved its position on the amount of the refund.
Ratio decidendi
This summary is intended to identify the ratio decidendi, meaning the legal reasons for deciding and the binding part of the decision.
AI confidence in this ratio decidendi summary: high
An occupancy condition that limits who may lawfully occupy a dwelling does not, by that fact alone, amount to a prohibition on separate use or disposal for the purposes of note 2(c) to group 5, Schedule 8; the proper construction of the planning condition is determinative. Further, whether supplies used in constructing a dwelling are used in the course or furtherance of a business depends on the real nature of the activity—a privately funded, one-off construction intended as the owner's home is not necessarily in the course or furtherance of a business.
Obiter dicta
This summary is intended to identify obiter dicta, meaning observations made by the way that were not necessary to deciding the case and are not binding.
AI confidence in this obiter dicta summary: medium
The notes suggest that determining whether a planning condition is a prohibition should rely on the wording of the condition rather than extraneous facts surrounding the grant of permission, to avoid uncertainty. Also noted is HMRC Notice 719's view that occupancy restrictions limiting classes of occupants do not alter whether a building is designed as a dwelling, which supports a construction-focused approach.
Warning
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