http://www.dvla.gov.uk/vehicles/regrebil.htm
Part A quotes:
In order to retain the original registration mark:
Cars and Car-Derived Vans must use:
The original unmodified chassis or unaltered bodyshell (i.e. body and chassis as one unit - monocoque); or
A new chassis or monocoque bodyshell of the same specification as the original supported by evidence from the dealer/manufacturer (e.g. receipt)
And two other major components from the original vehicle - see list below
Suspension (front & back)
Axles (both)
Transmission
Steering Assembly
Engine
If a second-hand chassis/monocoque bodyshell is used, the vehicle must pass a ESVA/SVA test after which a "Q" prefix registration number will be allocated.
So effectively, he is correct, it should keep the H plate as he has used a new shell. however, it's not the SAME shell as the old one (now a Mk3 instead of a Mk4 shell) so then you have to look at Part B, in which it scores 9 points. 8 points needed to keep original plate, so again it is correct on that score. However, he's now made it look like an S1 instead of the original S2 that it was 'born' from, so I still look at it as a replica on a proper H plate.
**EDITED TO ADD I NEVER SAW THE POST ABOUT USING BRAND NEW PARTS. THIS HAS ALTERED THE EFFECT ON PART A (TWO OTHER MAJOR COMPONENTS) AND NOW MAKES IT A Q-PLATE IN MY EYES..OR SHOULD BE A Q.