HMRC wants property developers to file retrospective VAT claims after a change of mind about how many buildings can make a home.

Developers who have converted a series of buildings into a single home since August 23, 2012, can make the claim.

The HM Revenue and Customs (HMRC) U-turn accepts that any number of buildings developed into a single home now qualify for zero-rated VAT.

To meet the revamped rules:

The development must have been a single building designed to be a single home

The work to convert more than one building into a home must have been a single project carried out under a single consent

If the development was completed in stages, HMRC will consider each stage an annexe and refuse the VAT claim unless the buildings are on one site and the work was completed without any unreasonable delay

No one should have moved into part of the development until the entire works were completed

HMRC also accepts that if some developments failed to qualify for zero-rated VAT, they might still meet the requirements for VAT at 5%.

Full details of the new rules are published online as HMRC Customs Brief 13 2016.

“This brief explains the change in policy relating to the treatment of dwellings that have been formed from either the construction of new buildings, or from the conversion of non-residential buildings into a dwelling. HMRC now accepts that single dwellings can be formed from more than one building,” said a spokesman.

Under previous rules, HMRC had decided that although a building could include more than one home, a home could not be formed from more than one building.

This was based on a definition in the VAT Act 1994 which was overturned by a First Tier Tribunal tax case.