This was a case relating to the application of the DIY Housebuilders Scheme. The Appellant claimed a VAT refund of £12,543.78 which HMRC disallowed on the grounds that the work to the property was an extension of an existing property rather than a ‘new build’.
The Appellants had a two-bedroom bungalow which they intended to alter and extend to provide a five-bedroom home. In January 2012 they obtained planning permission for “extension and alteration to dwelling”. The work involved retaining three exterior walls of the existing bungalow, a small part of one gable end and an interior wall which ran lengthways through the middle of the bungalow. The other part of that gable end was to be removed and that was where the bungalow was to be extended.
As the work progressed it became clear that some of the existing structure was unstable and the interior wall would also have to be removed. The
