The University of Kent v The Commissioners of Customs and Excise, V 18625

JurisdictionUK Non-devolved
JudgeJohn CLARK
Judgment Date24 May 2004
RespondentThe Commissioners of Customs and Excise
AppellantThe University of Kent
ReferenceV 18625
CourtFirst-tier Tribunal (Tax Chamber)

VAT – zero-rating – whether accommodation units “caravans” within item 1 of Group 9 Schedule 8 VATA 1994 – no

VAT – exemption – whether accommodation units immovable within Art. 13B(b) of the Sixth Directive – no



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Tribunal: JOHN CLARK (Chairman)


Sitting in public in London on 15 January 2004

Mr PJ Coombs, Assistant Director of Finance, The University of Kent, for the Appellant

Mr Andrew O’Connor of Counsel, instructed by the Solicitor for HM Customs and Excise, for the Respondents



  1. The University of Kent (“the Appellant”) appeals against a decision of the Commissioners contained in a letter dated 8 May 2003. There were two aspects to this decision. The first was that accommodation units known as “Lodja Sleep” units were not caravans for the purposes of VAT. The second was that the supply of such units did not constitute the letting of immovable property. The Appellant appeals against this first part of the decision, and in the alternative against the second part.

The law

  1. Section 30(2) of and Items 1 and 3 of Group 9 of Schedule 8 to the Value Added Tax Act 1994 provide that supplies of the following are to be zero-rated:

1 Caravans exceeding the limits of size for the time being permitted for the use on roads of a trailer drawn by a motor vehicle having an unladen weight of less than 2,030 kilogrammes.

3 The supply of such services as are described in paragraph 1(1) or 5(3) of Schedule 4 in respect of a caravan comprised in item 1 . . . ”

There is no definition of “caravan” in the Value Added Tax Act 1994.

Paragraph 1(1) of Schedule 4 to the Value Added Tax Act 1994 provides:

1—(1) Any transfer of the whole property in goods is a supply of goods; but, subject to sub-paragraph (2) below, the transfer—

(a) of any undivided share of the property, or

(b) of the possession of goods,

is a supply of services.”

  1. Section 29(1) of the Caravan Sites and Control of Development Act 1960 defines “caravan” as follows:

““caravan” means any structure designed or adapted for human habitation which is capable of being moved from one place to another (whether by being towed, or by being transported on a motor vehicle or trailer) and any motor vehicle so designed or adapted, but does not include—

. . . (b) any tent.”

  1. Under regulation 8(1), item 7 of the Road Vehicle (Construction and Use) Regulations 1986 (SI 1986/1078) the maximum width for “any other trailer drawn by a vehicle other than a motor cycle” is 2.3 metres.

  2. Article 13B(b) of the EC Sixth Directive provides that subject to certain conditions, Member States are to exempt:

(b) the leasing or letting of immovable property excluding:

1 the provisions of accommodation, as defined in the laws of the Member States, in the hotel sector or in sectors with a similar function, including the provision of accommodation in holiday camps or on sites developed for use as camping sites;

2 the letting of premises and sites for parking vehicles;

3 lettings of permanently installed equipment and machinery;

4 hire of safes.”

  1. Section 30(2) of and Item 1 of Group 1 of Schedule 9 to the Value Added Tax Act 1994 provide for exemption in respect of:

1 The grant of any interest in or right over land or of any licence to occupy land”.

This is subject to a number of exceptions that are not relevant to the present case.

The evidence

  1. Both the Appellant and the Commissioners submitted bundles of documents including photographs of the units as installed on the Appellant’s premises. In addition, Mr Terry Shane Marsh, General Manager of Rollalong Hire Ltd, made a witness statement and gave oral evidence as a witness for the Commissioners, and Mr S Blay, one of the principal members of the Appellant’s management team responsible for the provision of the units, gave oral evidence for the Appellant. From the evidence we find the following facts.

  2. For the academic year 2002-2003 the Appellant admitted a record number of students. As the policy was to guarantee each student a place on campus, there were too many students and not enough study bedrooms. The Appellant had to put students in hotel rooms, find temporary lodging and hire temporary accommodation. For the latter purpose the Appellant contacted Rollalong Hire Ltd, and hired 12 Lodja Sleep units for that academic year. The units were removed in June 2003. Each unit cost £75 per week to hire, and in addition Rollalong Hire Ltd charged 17.5% VAT.

  3. The units were a standard product of Rollalong Hire Ltd, and were designed as sleeping units (Certain modifications were made for the purposes of the Appellant’s proposed use of the units, as described below.) Another form of unit called “Dine” was available, being the same size, but designed solely for cooking, and containing a fitted refrigerator, microwave oven, a freezer, and seating for 8 persons. According to Mr Marsh, it was not anticipated that the Lodja Sleep units would be used for cooking or eating. The dimensions of the units were: width, 2700 mm, length, 3600 mm, and internal ceiling height 2300 mm.

  4. The units had been located in a car park adjacent to Keynes College on the campus. The siting, which was discreet, had been agreed with the local planning authority. A level survey had shown that the site had a natural incline. A contractor was engaged to place paving slabs and concrete blocks under the legs of the units. Other infrastructure requirements had involved new duct works to carry electricity and water from the adjacent College, partly using the existing duct but also in part in a new duct. Work was also carried out on waste and drainage connections, and the water supply.

  5. The units were transported by lorry, three units on each lorry. On arrival at the site, the units were unloaded from the lorries by means of a crane device built into each lorry. The approximate unloading time for the three units was between one and one and a half hours. In addition to the driver, each lorry had a further employee of Rollalong Hire Ltd to assist with the unloading and to ensure that each unit was placed level on the site chosen by the Appellant. Units of this type have no foundations, and are sited on the ground by means of four adjustable corner points. Their approximate weight is one tonne, and their external height between 8 and 9 feet.

  6. The units were set out in two rows back to back, creating a service corridor between them. Once they had been put in place, timber steps and landings had had to be provided to the door of each unit. In some cases it had also been necessary to provide a timber skirt around units because of their location; as they were higher above the ground, a panel was required for safety purposes, to prevent people from going under the units. A timber member was secured to the tarmac of the car park with “fisher bolt connections”. A timber batten was bolted to the sub-frame of the unit, and a shaped plywood panel was screwed on to the timber. Subject to this, the units were freestanding. Service corridors were provided, with access framing and panelling to the service aisle. To close the other end, some garden fencing had been adapted in order to protect the drainage run, which was partly above and partly below ground. Closed circuit television monitoring had been installed, together with lighting to support this. Contractors had run the electricity and water connections. The electricity connection had been taken from an adjacent sub-station and fed through the...

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