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	United Kingdom VAT & Duties Tribunals Decisions
You are here: BAILII >> Databases >> United Kingdom VAT & Duties Tribunals Decisions >> Witherow v Revenue & Customs [2007] UKVAT V20040 (06 March 2007) URL: http://www.bailii.org/uk/cases/UKVAT/2007/V20040.html Cite as: [2007] UKVAT V20040

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20040

Application for the Refund of VAT under The DIY Housebidders Scheme – S.35 VATA 1994 - issue of proving that the Dwelling qualified on the grounds that it had not been used as a dwelling for a period of ten years - appeal allowed

BELFAST TRIBUNAL CENTRE

GARETH RONALD WITHEROW Appellant

and –

THE COMMISSIONERS FOR HER MAJESTY'S REVENUE & CUSTOMS Respondents

Tribunal: IAN W HUDDLESTON (Chairman)

MRS JOAN WHITESIDE

Sitting in public in Belfast on 30 January 2007

Mr Ronald Witherow for the Appellant

Mr Christopher Watson, BL for the Respondents

© CROWN COPYRIGHT 2007


 


DECISION

Appeal

1. This is an appeal against a decision by the Respondents to reject a claim for the refund of VAT made by Gareth Ronald Witherow ("the Appellant") under the Do It Yourself Builders and Converters Refund Scheme ("the DIY Housebuilders Scheme") pursuant to Section 35 of the Value Added Tax Act 1994 ("the Act") for the sum of £2,218.38, as notified to the Appellant in a review letter from the Respondents dated the 26^th September 2005.

Facts

2. The Appellant, who is not registered for VAT, owns a dwelling house at 66 Downland Road, Limavady, County Londonderry, Northern Ireland, BT49 0HR ("the Premises").
3. On 22^nd May 2005 the Appellant made a claim under the DIY Housebuilders Scheme for a refund of the sum of £2218.38 in respect of works done upon the Premises. That claim was acknowledged by the Respondents on the 26^th May 2005 when further information was requested from the Appellant, including evidence that the Premises had not been used as a dwelling for a period of at least ten years prior to commencement of the work.
4. By way of response, the Appellant wrote to the Respondents indicating that the Premises had been vacant since 1990 when the Appellant's grandmother, Mrs. Mary Witherow, had vacated the Premises due to illness, and had moved in with the Appellant's father and his family (including the Appellant) at 66A Downland Road, Limavady. The Appellant included with that correspondence a letter from Councillor Leslie Cubbitt dated 24^th May 2005 confirming that the Premises had been vacant since 1990.
5. By a letter dated the 20^th June 2005, the Respondents requested the following information from the Appellant:

(a) evidence that no-one was registered on the electoral roll during the ten years prior to work commencing;

(b) evidence that the council tax paid on the Premises was for an empty Premises.

6. In the review letter dated the 26^th September 2005 the Respondents informed the Appellant that his claim had been rejected due to insufficient evidence having been provided by the Appellant to demonstrate that the Premises had not been lived in for at least ten years prior to commencement of the works. A copy of VAT Notice 719 (VAT Refunds for Do It Yourself Builders and Converters) was enclosed with that letter.
7. The Appellant requested a re-consideration of the decision indicating that he had provided all information available to him, by way of a letter dated the 6^th January 2006, the Respondents upheld, following a re-consideration of this case, the decision to reject the Appellant's application. The Appellant lodged a Notice of Appeal dated the 15^th January 2006 indicating "I think [this] is an unfair decision as we have supplied the information we have been able to access from the appropriate authorities."

The Respondent's Case

8. The Respondent's contention is that in order to claim a refund under Section 35 of the Act:

the Appellant must be carrying out work in relation to a residential conversion (Section 35(1A)(c));

"a residential conversion" is defined at Section 35(1D) of the Act as the conversion of a non-residential building;

"non-residential" in such a case is defined by Note (7A) of Group 5 to Schedule 8 of the Act, pursuant to Section 35(4A) of the Act;

"Note 7(A) of Group 5 to Schedule 8 of the Act" defines a building as "non-residential" if:

"It is designed or adapted for such use [ie as a dwelling] but:

(i) it was constructed more than ten years before the commencement of the works of the conversion; and

(ii) no part of it has, in the period of ten years immediately preceding the commencement of those works, been used as a dwelling."

9. It is the Respondent's case that the Appellant has not provided sufficient evidence to show that the Premises had not been used as a dwelling as defined by Note (7A) of Group 5 to Schedule 8 of the Act. In support of that contention, they adduced the following evidence:

(a) that rates continued to be paid on the Premises up until 1998

(b) that the electricity supply remained at the Premises uninterrupted;

(c) at the time of the decision now in dispute, there had been an unsatisfactory reply to the Respondent's request for evidence that no-one was registered on the Electoral Roll during the ten years prior to the work commencing, and further that the Respondents had elicited from the Electoral Roll that four people were living in the Premises between 1998 and 2003, namely:

(i) Mary Witherow from 1998 to 2003;

(ii) Nicole J. Witherow in 1999;

(iii) Ronnie N. Witherow in 1999;

(iv) Valerie Witherow in 1999.

10. Taking all that into account, the Respondents were of the view that the Appellant was not entitled to a refund under the DIY Housebuilders Scheme.

The Appellant's Case

11. The Appellant was represented by his father, Mr. Ronald Witherow ("Mr. Witherow"), who restated the facts as outlined above. In response to the Respondent's case Mr. Witherow made the following points:

(a) the suggestion made by the Respondents that the Premises were occupied (by reference to the Electoral Roll) was incorrect and, in support, Mr. Witherow produced to the Tribunal copies of old passports, correspondence with Inland Revenue and driving licences confirming that Nicole J. Witherow (his daughter), Valerie Witherow (his wife) and Mr. Witherow himself had a postal address of 66A Downland Road, notwithstanding the fact that they might appear on the Electoral Roll at Number 66 Downland Road (ie. the Premises);

(c) evidence was given that the Premises (number 66 Downland Road) were approximately fifty yards from Mr. Witherow's property at 66A Downland Road, and that often there was confusion regarding the post for both properties, but that given the proximity of the two dwellings and the fact that his mother had been the only person in occupation, the confusion over the postal addresses had not caused the family a great deal of inconvenience;

(d) Mr. Witherow gave evidence that the purpose for keeping the Premises supplied with electricity and heat through the period from 1990 (when his mother moved in with him into the property at 66A Downland Road) until 1998 (when she moved into a nursing home) was to keep the property habitable, lest she be able to move back into the property. In 1998 it became clear that that would not happen and she spent the remaining years of her life in Garvagh Private Nursing Home.

(e) (i) In response to the requests from the Respondents for additional and corroborating evidence that the Premises had been vacant through the requisite ten year period prior to commencement of the works, Mr. Witherow indicated that he had made various attempts to obtain information from the appropriate authorities, but it had proved difficult.

(ii) He had approached the Northern Ireland Housing Executive (being the statutory body charged with the provision of social housing) but they refused to provide any confirmation in respect of a property which they did not own.

(iii) He had provided rates information, but because the dwelling had remained furnished, rates had continued to be paid (as the law would have required them to be) throughout the period in which the Premises were furnished and, therefore, the Premises would have been rated and rates would have been demanded throughout the period under examination.

(iv) That the only evidence which he had been able to elicit in support of his contention that the Premises were vacant through the relevant period was the letter he had been able to obtain from his local Councillor, Mr. Cubbitt, dated 24^th May 2005, which he had already presented to the Respondents.

Decision

12. Section 35 and Note (7A) to Group 5 of Schedule 8 to the Act makes it quite clear that the decision before this Tribunal is one of fact. The question is whether the Premises were "used as a dwelling for the period of ten years immediately preceding the commencement of the works." On the balance of the evidence before the Tribunal, it concludes that the Premises were vacant during that period and that, notwithstanding that the Premises were serviced by electricity and heated, and that rates continued to be paid, the Premises were not used as a dwelling during that period. The Tribunal was sympathetic to the position that Mr. Witherow found himself in in attempting to comply with various requests from the Respondents for confirmation that the Premises had been vacant throughout the requisite period. It did appear to the Tribunal that the Appellant had tried to make every effort to comply with the Respondent's letters, requests for evidence and the detail set out in Notice 719. In particular, the Tribunal had regard to paragraph 7.3 of Notice 719 which sets out the type of evidence that Customs would accept in proving that the property had not been occupied for the relevant ten year period before commencement of the works. Specifically it is stated, at 7.3.2:

"If you hold a letter from an empty property officer certifying that the property has not been lived in for ten years, you do not need any other evidence."

13. In Northern Ireland there is no equivalent of an "empty property officer". The statutory function for the provision of social housing rests with the Northern Ireland Housing Executive and, in this case, although the Appellant had made an application to the Northern Ireland Housing Executive, it had refused to provide any confirmatory evidence, on the basis that the Premises in question was not one over which it had any statutory jurisdiction. In those circumstances the Appellant had, not unreasonably, approached his local Councillor, Mr. Cubbitt who, in his letter of 24^th May 2005, purported:

"to certify that the Premises had been vacant since 1990"

14. In the circumstances where the Appellant had, as he was entitled to do, maintained services to the Premises and, as he was obliged to do by law, continued to pay rates in respect of the furnished property, it was not unreasonable that the only evidence that he could produce was a certificate of an independent third party, such as a Councillor. In those circumstances, the Respondents should have given greater weight to Mr. Cubbitt's letter.
15. For those reasons, the Appeal is allowed.
16. No order as to costs.
IAN HUDDLESTON CHAIRMAN RELEASED: 6 March 2007

LON/2006/116