Two properties joined by a garage - VAT on new build of one the properties

[edgood]

I hope someone can help with my situation.

We have bought a house and a cottage which are joined by a garage. The plan is to remove the garage so that the properties are separate. The cottage will be renovated as a holiday let. The house will be basically rebuilt.

The current planning permission for the project shows three partial walls of the house being retained. A structural engineer, however, tells us that the retention of these walls will pose a health and safety danger to workers and will cause considerable cost and design issues during the build. The suggestion is that we go for new build status and therefore save VAT on materials, etc.

The design and appearance would be identical under a new build to the previous refurb option.

My questions are:

1. I understand that for HMRC to consider it as a new build, the planning permission should specify this. Is this correct and would a variation to the planning permission, stating this OR that the house needs to be demolished prior to building be sufficient to establish this to HMRC's satisfaction?

2. The project manager would like to build the new detached garage prior to demolishing the house (he would use this for stores, etc). I have said that I had read somewhere that no work should start until the demolishing of the house had been completed - except for work needed to allow the demolishment. Am I right - or would the garage still be zero rated if construction of it commenced before the house had been demolished to ground level?

3. Am I correct that, if new build status is confirmed, the demolishment work can be zero rated?

4. I assume the refurbishment of the cottage (which work would attract the standard rate of VAT) has no effect on the new build status of the new house (they are only currently connected by a garage which will go, and there is no internal connection between the two properties). Am I right?

Any advice on this will be very gratefully received!!

[les35]

This is the sort of question that really needs proper paid advice, as any land/property/construction issues are potentially quite complex. Rules for holiday cottages are different to those for dwellings.
But, a couple of comments:
1. works carried out can only be zero rated if done in compliance with formal Planning Permission.
2. the construction of a garage will follow the liability of the main house only if the works are carried out as part of the same contract, and if the garage is to be used in conjunction with the house.