What is a dwelling? A VAT conundrum
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Article by John Davison, head of VAT and indirect taxes, Baker Tilly. This article appeared in the January 2005 issue of Tax Adviser. The definition of a dwelling should be quite straightforward - being an abode or a place where you live. It might also be thought that there would be a single definition for VAT purposes that would be used for a dwelling. Unfortunately this is not the case. While the esoteric differences that arise may be understandable for the specialised accountant, lawyer or consultant, they are not comprehensible for most builders or for a person who just wants to build a house. Indeed, just getting the order of doing things wrong can jeopardise the treatment of a transaction, which hardly seems fair. After all, the relief is supposed to be for a dwelling, the place a person lives in: getting the paperwork wrong, or doing things in the wrong order, does not make the property any less of a dwelling - except for VAT reliefs.
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