VCONST02380 - Zero-rating the construction of buildings: is a building being constructed: garages
As an exception to the normal rule the construction of a garage can be zero-rated, subject to certain conditions. The relevant law is the Value Added Tax Act 1994, Schedule 8, Group 5, Note 3.
The garage must be constructed or converted at the same time as the dwelling (in other words, either in tandem or immediately following each other) and be used with it.
In Chipping Sodbury Town Trust (VTD 16641), planning permission for the garages was sought whilst the dwellings were being constructed. However, the garages were constructed after the dwellings had been completed but before the overall project was finished. The appeal was dismissed as the garages were not constructed ‘at the same time’ as the dwellings.