Released 21 September 2021
In Andrew Ellis and Jane Bromley  TC08277, the First-tier Tribunal (FTT) found that HMRC’s rule that only one claim could be made under the DIY housebuilder’s scheme was ultra vires and that multiple claims should be permitted.
The appellants constructed their own home. The construction work was undertaken over the course of many years as the work was primarily undertaken at weekends and during holidays. Before work was completed the local council considered that the house was in a state which meant that it was subject to council tax.
The appellants submitted two claims under the DIY scheme for a refund of VAT incurred on the project. The first, submitted in 2017, was accompanied by the local authority’s certificate of valuation but not a certificate of completion for building regulations purposes. This claim was paid by HMRC. The second claim, submitted in 2019, was refused by HMRC on the grounds that only one claim can be made. At the time the second claim was submitted the house was still not completed.
The guidance notes which accompany the scheme claim form explicitly state that only one claim can be made. However, the appellants did not read these in detail when completing the form as they considered that it was self-explanatory.
The FTT concluded that, although VATA s. 35 (which is the statutory basis for the DIY scheme) refers to the making of ‘a claim’, this should be taken to include claims in the plural as well as the singular. The Interpretation Act 1978 s. 6 provides that ‘In any Act, unless the contrary intention appears…….. Words in the singular include the plural and words in the plural include the singular’ and s. 35 does not include an express statement that ‘a claim’ should be read in the singular (para. 42).
The VAT Regulations 1995, reg. 201 requires that claims submitted are accompanied by evidence of completion of the building. The FTT found that this was ultra vires because requiring that claims be supported by evidence of completion restricted a claimant to making a single claim (para. 46).
Given that the DIY scheme claim form explicitly states that only one claim may be made, DIY claimants may be reluctant to challenge HMRC’s express policy (and therefore risk their own money) by submitting multiple claims. Because the majority of DIY claims are submitted by unrepresented taxpayers it is to be hoped that HMRC will clarify whether the FTT’s decision in this case will be accepted.
For commentary on the DIY housebuilder’s scheme see In-Depth at ¶34-000.
Comment by Sarah Kay, Senior Tax Writer, Croner-i Ltd.
 UKFTT 0343 (TC)