I'm building a little one bedroom cottage with the intention of using it for holiday letting.
Whilst I have full planning permission for a normal house, I have chosen to build in such a way that it can be classed as a 'portable building' and therefore be exempt from building regulations (in much the same way as, for example, a static caravan would be).
I am trying to find out how to connect up a water supply. I am considering simply teeing off my own house supply, as I presume this would be perfectly OK if it was for a caravan. However Scottish Water have told me that I need to apply for a commercial connection because I will be running a business.
It was my understanding that a house is a house, and whether it is owner occupied, long term let, or FHL, shouldn't make any difference. Certainly when I looked into it, building regulations would be the same for a house regardless of purpose. It isn't a factory or a shop.
Any thoughts on this?
Is my letting property 'commercial' or 'domestic'?
Possibly a lot depends of your planning permission. I can never move into my own holiday cottage or sell it off separately from the main dwelling, so I could never claim that it was domestic use only. Did you disclose at the planning stage that you intended to use it for holiday accommodation? I assume you did and that is how Scottish Water know of your intentions. If you are allowed to and decided to move into it in the future, I expect Scottish Water would then consider you a domestic supply and adjust their records/bills accordingly.
Well if you have absolutely no planning restrictions that's a big help, especially if you managed to obtain permission for a dwelling. I only obtained permission BECAUSE I mentioned that I wanted to use the dwelling for tourism. I would never have obtained permission for a residential/domestic dwelling alone. I'm sure that the majority of people are on a domestic supplies for FHLs but it is the fact that it is a new build that makes it more problematic and has to comply with everything from the outset. I guess you could request a domestic supply but, of course, you run the risk of them finding out (not sure how likely that is). Given that you are not restricted to business use I'm really not sure how SW would view it in your case. You may just need to try and have another anonymous conversation and tell them that planning was not for commercial use. Being considered a business isn't all bad. Not sure if it is the same for the Isle of Skye, but as a business/commercial property, I pay no business rates at all at the moment. There are definitely others on here who have new builds. Hopefully they may be able to tell you their experiences.
Thanks for your comments, I am getting the impression that this could be a bit of a grey area. I wonder where the boundaries are drawn- for example, if I got a static caravan beside my house in order to provide additional B&B accommodation, I wouldn't have expected to need a new water connection to it, let alone a commercial one. But if the same caravan was let as a FHL, maybe it would be different rules? So confusing, and I'm not even sure who I should be speaking to...
B&B would definitely be considered commercial use and you would need planning to place a static caravan on site for commercial use for such an activity. I doubt if you can compare a 'portable dwelling' which required planning permission (regardless of whether it required building regs) and actually constructing it, to a ready made static caravan whether ancillary accommodation or not. I expect the criteria would be:
Is it detached and totally self contained i.e. can operate independently of the main dwelling?
Is it a new build and did it requite planning?
Is it going to be resided in by the owner or as an FHL?
It certainly does sound like a grey area but you may have to accept what SW say. You need to find out what their specific criteria is and then I think it would up to you to demonstrate that you didn't need a commercial supply.
Out of interest, are you allowed to claim back the VAT on the build? If not then, I would say the HMRC consider it commercial too? If HMRC are allowing a VAT claim on build purchases then I would say they class it as a domestic dwelling. They might be a good starting point for clarifying its status.
In my case, although I have built a 'house' I could not claim the VAT back because I am operating a business from the premises.
Is it detached and totally self contained i.e. can operate independently of the main dwelling?
Is it a new build and did it requite planning?
Is it going to be resided in by the owner or as an FHL?
It certainly does sound like a grey area but you may have to accept what SW say. You need to find out what their specific criteria is and then I think it would up to you to demonstrate that you didn't need a commercial supply.
Out of interest, are you allowed to claim back the VAT on the build? If not then, I would say the HMRC consider it commercial too? If HMRC are allowing a VAT claim on build purchases then I would say they class it as a domestic dwelling. They might be a good starting point for clarifying its status.
In my case, although I have built a 'house' I could not claim the VAT back because I am operating a business from the premises.