Revenue and Customs Commissioners v J3 Building Solutions Ltd

Value added tax – Zero-rating. The evaluative approach taken by the First-tier Tribunal (Tax Chamber) in deciding whether a building had ceased to exist by reference to the construction works themselves, for the purpose of deciding whether those works should be zero-rated for VAT purposes, was erroneous in the light of Note 18 of Sch 8 to the Value Added Tax Act 1994. The Upper Tribunal (Tax and Chancery Chamber) held that, applying the correct approach, the works at issue amounted to an 'alteration' with the result that Note 16 of Sch 8 operated to exclude the relevant supplies from the zero-rating that would otherwise have been generated by Items 2 and 4 of Group 5 of Sch 8 to the Act.

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