Phased building construction fails to win zero rating argument at York

York University has been unsuccessful in arguing for the zero rate to apply to a ‘phase two’ construction of a science lab (TC04417). The situation is fairly familiar and this decision is consistent with previous decisions. However, the outcome is unfortunate and shows how tax policy can have a distortive effect.

The original new building was to house a charitable research facility and such use qualified for the zero rate.