For VAT purposes, the supply of car parking facilities is usually standard-rated, whereas the grant by a developer of a lease of more than 21 years of a residential flat will be zero-rated. Accordingly, if a residential lease includes the demise of a car-parking space then the whole transaction will be zero-rated.

In a recent case, L granted long residential leases and then, 10-20 months later, granted similar length leases of the relevant car-parking spaces to the same Ts. It was held that the leases of the car-parking spaces should have been standard-rated (not zero-rated) since they were not part of a single composite supply, which amounts to a single economic transaction. In this particular instance, the consideration was not expressed to be VAT-exclusive, and so the developers were unable to pass the unexpected VAT onto the Ts (which would not have happened if the Standard Conditions of Sale had been used). Civilscent Ltd v HMRC [2009] UKFTT 102 (TC).