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Greenspace (UK) Ltd v The Commissioners for HMRC

[2023] EWCA Civ 106
A company sold insulated panels for conservatory roofs. The government said they should pay more tax because the panels were part of the roof, not just insulation. The court agreed, saying the panels did more than just insulate—they also kept out the rain, so they didn't qualify for the lower tax rate for insulation.

Key Facts

  • Greenspace supplies insulated roof panels for conservatories.
  • HMRC assessed VAT at the standard rate, while Greenspace used the reduced rate.
  • The dispute centers on whether the panels fall under 'insulation for roofs' in Schedule 7A of the Value Added Tax Act 1994.
  • The panels consist mainly of Styrofoam with an aluminum and powder coating for weatherproofing.
  • The panels are custom-made to fit existing conservatory roof structures, replacing existing panels.
  • The installation doesn't require replacing the existing roof framework.

Legal Principles

Reduced VAT rates are exceptions and interpreted strictly but not restrictively.

Expert Witness Institute v HMRC [2001] EWCA Civ 1882, [2002] 1 WLR 1674

Note 1(a) of Schedule 7A defines 'energy-saving materials' and must be interpreted according to its ordinary meaning.

Value Added Tax Act 1994, s 29A

The reduced rate applies only to insulation for specific items listed, not the items themselves.

Pinevale Ltd v HMRC [2014] UKUT 204 (TCC) and Wetheralds Construction Ltd v HMRC [2018] UKUT 173 (TC)

The test is whether the supply is 'insulation for roofs', not whether it's a roof itself or part of a roof.

This appeal's judgment

Outcomes

Appeal dismissed.

The supplied panels, while having insulating properties, are not solely 'insulation for roofs' because they also serve as weatherproof roof coverings. This goes beyond the definition in Note 1(a).

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