What is a dwelling for VAT purposes? sounds like a simple question but it has been argued long and hard lots of time.
VAT works on the basis of a supply being guilty until proven innocent. It is no use arguing that some future event will affect what is happening now. This is a lesson learned the hard way by Mitchell & Anor  TC 06418 in a failed DIY housebuilder claim. While winning their initial argument which was based on established grounds that having bathing facilities and installing a microwave and kettle were all you need to create a new dwelling, the appeal failed on the terms of the planning consent.
A DIY VAT claim can only succeed where the new ‘dwelling’ can be both separately used and disposed of, which effectively turns on the terms of the planning consent. Here there was a condition in the planning consent restricting how the building was allowed to be used and this was the point where the appeal failed.
The consent specified that the building ‘shall not be used as a separate residential unit at any time’ which really made for an open and closed case.
What is a dwelling for VAT purposes? what it will never be is an annex or extension to an existing building. It needs to be capable of separate use and disposal so it really is a complete waste of time arguing that the planners would later agree to remove the condition. It is all about the reality of the situation at the time of making the claim.