To encourage urban regeneration, a reduced VAT rate of 5% applies to the following supplies of building services and related goods supplied in connection with:

(1)changing the number of ‘single household dwellings’ (SHD) in a building (e.g. converting a house into flats) (VATA 1994, Sch. 7A, Grp. 6, item 1 and Note 3);

(2)converting a single household dwelling or ‘house in multiple occupation’ (HMO) into a care home or other ‘relevant residential purpose’ (RRP), or conversely, a care home into one or more single household dwellings) (VATA 1994, Sch. 7A, Grp. 6, item 1 and Note 4); and

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