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).