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HMRC internal manual

VAT Construction

HM Revenue & Customs
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Reduced-rating the conversion of premises to a different residential use: changed number of dwellings conversions

The following decision table will help you decide if a conversion is a ‘changed number of dwellings conversion’:

Step Description
1 Identify the ‘premises’ that have been converted. The premises may be either the building or any part of the building.
Note: Any number of ‘premises’ may be identified (in other words the building may be split into any number of parts) but each is examined on its own. In order to be considered a premises, a part must be large enough to be capable of containing a single household dwelling and must have physical boundaries, that is walls, floors and ceilings.    
  2 Does the premises (in other words the building or part of the building being examined) before conversion, contain any single household dwellings?
  • Yes, go to step 3.
  • No, go to step 4.     
      3 Has the total number of single dwellings in the premises being examined changed (either an increase or decrease) as a result of the conversion?
  • Yes, go to step 4.
  • No, the work to those premises is not reduced-rated.     
      4 Does any part of the premises contain the same number of single household dwellings after conversion as before? (The number can be zero).
  • Yes, the work to those premises is not reduced-rated. It may however, be possible to identify alternative ‘premises’ that are the subject of a qualifying conversion (such as part of a building), return to step 1.
  • No, go to step 5.     
      5 After the conversion, is there one or more single household dwelling in the premises being examined?
  • Yes, the works are, subject to the guidance in VCONST06400 and VCONST06450, a qualifying conversion.
  • No, the work to those premises is not reduced-rated.   

You can find examples of ‘changed number of dwellings’ conversions in Notice 708 Buildings and construction.