Qualifying conversion did take place

In the recent VAT tribunal decision of Nabarro the judge held that the 5% VAT rate was available in a situation where a house with an adjacent self contained flat was converted into a single dwelling. HMRC had issues with whether the flat was actually a separate dwelling and whether the pre-conversion flat and house existed within one building. It was held there was a single building comprised of two 'single household dwellings' prior to the works and one 'single household dwelling' after the works therefore the 5% rate was applicable on the qualifying works. The fact the flat was completely demolished in the course of the works to allow for the extension of the main house was held not to be relevant nor the fact that the pre-existing flat did not have separate incoming utilities.