Revenue and Customs Commissioners v Pinevale Ltd
| Jurisdiction | UK Non-devolved |
| Judgment Date | 07 May 2014 |
| Neutral Citation | [2014] UKUT 202 (TCC) |
| Date | 07 May 2014 |
| Court | Upper Tribunal (Tax and Chancery Chamber) |
[2014] UKUT 0202 (TCC)
Upper Tribunal (Tax and Chancery Chamber)
Mr Justice David Richards
Peter Mantle, counsel, instructed by the Solicitor to HM Revenue and Customs appeared for the Appellants
The Respondent did not appear and was not represented
Value added tax - Reduced-rate supply - Energy saving materials - Insulation for roofs - Polycarbonate panels for conservatories - Panels supplied to create new roof - Panels supplied to replace existing panels - Whether energy saving materials comprising insulation for roofs - HMRC appeal allowed - Value Added Tax Act 1994 ("VATA 1994"), Value Added Tax Act 1994 schedule 7A group 2Sch. 7A, Grp. 2.
The Upper Tribunal allowed an appeal by HMRC against a FTT decision that the supply of insupolycarbonate panels in conservatories was eligible for the five per cent reduced VAT rate. The UT held that the panels were not energy saving materials and would therefore be taxable at the standard rate.
This is an appeal from the FTT to the UT in respect of the VAT liability of certain roofing materials and whether they fall within the reduced rate of five per cent for energy-saving materials in VATA 1994, Value Added Tax Act 1994 schedule 7A group 2Sch. 7A, Grp. 2.
Pinevale Ltd manufactured and installed insupolycarbonate roof panels and radiation strips in conservatories and charged VAT at the reduced rate of five per cent on the basis that they were "energy-saving materials" for residential accommodation.
HMRC challenged the rate and decided that the radiation strips and the polycarbonate sheets should be standard-rated. Pinevale appealed to the FTT which upheld the reduced rate on both items.
HMRC accepted the decision for the radiation strips, but appealed against the decision that the polycarbonate roof panels qualified for VAT at the reduced rate. HMRC's case was that the polycarbonate sheets were not insulation for roofs, but the roofs themselves.
Value Added Tax Act 1994 schedule 7A group 2Sch. 7A, Grp. 2 (Installation of energy-saving materials) contains notes which apply for the interpretation of the group. Note 1 provides as follows:
For the purposes of this Group "energy-saving materials" means any of the following -
(a) insulation for walls, floors, ceilings, roofs or lofts or for water tanks, pipes or other plumbing fittings; …
The legal issue considered by the FTT was whether the polycarbonate sheets fell within note 1(a).
The FTT held that there were two tests and both had to be met:
(2) Whether the polycarbonate sheets were insulation; and
(3) Whether it was for roofs.
The FTT held that the two tests were met and that the five per cent reduced rate did apply, rejecting HMRC's narrow interpretation of the note.
The UT rejected the FTT's interpretation of note 1(a). It held that the note was a very specific list of products that were selected for the reduced rate of VAT.
It said at para 19:
The error, in my judgment, made by the Tribunal was to construe "insulation for roofs" as extending to the roof itself when it has energy-saving properties, rather than being confined to insulating materials attached or applied to a roof.
The UT thus...
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