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HMRC internal manual

VAT Construction

Zero-rating the construction of buildings: is a building being constructed: Tribunal decisions on ‘annexes’

The Tribunal cases below have considered whether a new structure is an annexe:

  • in Bryan Thomas Macnamara (VTD 16039), an existing school building surrounded a gap covering about eight by nine metres on three sides. The new two-storey structure filled the gap and did not impose a loading on the existing building. The upper floor, described as ‘science laboratory’, was only accessed through the existing building and was conceded to be standard rated. The lower floor, described as ‘new teaching area’, had an entrance from a playground and access to a corridor in the existing building through an opening of about two metres wide. The appeal was dismissed.
  • in Grace Baptist Church (VTD 16093), a church’s chapel house was of two storeys of domestic accommodation contained mainly within the same shell as the church. It had its own main entrance from the street and access to the church itself. The chapel house was demolished and a new structure filling the space was erected. The structure served various community uses and had independent heating and fire alarm systems but retained an inter-connecting door to the church. The appeal was allowed.
  • in Colchester Sixth Form College (VTD 16252), the new structure filled a void between the original college building constructed in the 1930s and an attached structure built in the 1970s. The new structure had its own main entrance and staircase to upper floors but provided for free movement to staff and students without congestion throughout the new structure and existing building. The appeal was dismissed.
  • in Woodley Baptist Church (VTD 17833), a new first floor was added with its own separate entrance. The architectural solution was to open a separate entrance at the rear of the building by dividing an existing room to form a lobby from which led the new staircase. The appeal was dismissed.

Note: Although the access was through the existing building, we do not accept that additional storeys to an existing building, with access that is not through the existing building, can be an annexe.

  • in Thomas Rotherham College (VTD 17841), a multi storey addition to a sports hall was constructed. The appeal was dismissed.
  • in The Roman Catholic Diocese of Shrewsbury (VTD 17900), an existing church was widened on both sides and a meeting room, with lavatory and catering accommodation, added at one end. The appeal was dismissed.