Cases - Lower Mill Estate Ltd and Conservation Builders v Customs & Excise Commissioners

Record details

Name

Lower Mill Estate Ltd and Conservation Builders v Customs & Excise Commissioners

Date

[2008]

Citation

EWHC 2409

Legislation

Unknown

Keywords

Value added tax - VAT avoidance scheme - testing of Halifax doctrine - abusive practice

Summary

The Upper Tier Tribunal decision of Lower Mill Estate Ltd tested the Halifax doctrine. In this appeal, Lower Mill Estate had sold land to customers (VAT standard rated) for use for holiday accommodation and then arranged for a separate but connected construction company to construct new dwellings on the site (VAT zero rated).

HMRC had argued that the arrangement was abusive on the basis that the customer was effectively benefiting from an element of zero rating on the construction works whereas a purchase of completed holiday accommodation would normally be entirely VAT standard rated.

The Upper Tier Tribunal held this was not abusive as the purchaser of the land could, amongst other factors, have used a separate third party construction company to construct the properties. The arrangement also considerably eased the developer’s cash flow as funds were received on the day of the sale of the land and as the construction works proceeded on site rather than at the time of sale of a completed property.