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HMRC internal manual

VAT Construction

Alterations and repair or maintenance - case law and agreements: damp proofing

Damp proofing is work designed to repair or maintain a building. It is therefore not an ‘approved alteration’.

The following cases have supported that position:

  • The Vicar and Parochial Church Council of St Petroc Minor (VTD 16450): A dry area was constructed to prevent water penetration through a vestry wall. The Tribunal held that it was not an alteration.
  • DH Carr (VTD 19267): Damp proofing and insulation works carried out to improve the building. The Tribunal held that this was an approved alteration.

Comment: HM Revenue & Customs (HMRC) decided not to appeal against this decision in light of the facts of the case but would maintain that such works will not, ordinarily, qualify for relief.