AN Checker Heating and Service Engineers v The Commissioners for HM Revenue and Customs
| Jurisdiction | UK Non-devolved |
| Judge | Mrs Justice Rose,Judge Andrew Scott |
| Neutral Citation | [2018] UKUT 0292 (TCC),[2018] UKUT 0292 (TCC) |
| Court | Upper Tribunal (Tax and Chancery Chamber) |
| Subject Matter | Tax,14 September 2018 |
| Date | 14 September 2018 |
| Published date | 20 September 2018 |
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[2018] UKUT 0292 (TCC)
Appeal number: UT/2014/0003
VALUE ADDED TAX – reduced rate – energy saving materials supplied as part of a
single composite supply – whether the whole of the supply subject to the standard
rate of VAT or whether a component of the supply subject to a reduced rate of VAT
– appeal dismissed
UPPER TRIBUNAL
TAX AND CHANCERY CHAMBER
BETWEEN:
AN CHECKER HEATING & SERVICE ENGINEERS
Appellant
- and –
THE COMMISSIONERS FOR
HER MAJESTY’S REVENUE AND CUSTOMS
Respondent
Tribunal:
Mrs Justice Rose
Judge Andrew Scott
Sitting in public at The Rolls Building, Fetter Lane, London EC4A 1NL on 25
and 26 June 2018
David Milne QC and Charles Bradley, Counsel, instructed by Harper Macleod
LLP for the Appellant
Marika Lemos, Counsel, instructed by the General Counsel and Solicitor to HM
Revenue and Customs, for the Respondent
© CROWN COPYRIGHT 2018
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DECISION
Introduction
1. This is an appeal that turns on whether or not, as a ma tter of construction, Group 2
of Sch.7A to the Value Added Tax Act 1994 (“VATA 1994”) applies a reduced VAT rate
to a component of what is, for VAT purposes, otherwise regarded as a single supply.
2. An appeal was brought by AN Checker Heating & Service Engineers (“AN
Checker”) against VAT assessments issued by HMRC for the periods 03/06 to 09/08. At
the material time AN Checker made supplies of installing boilers or central heating
systems in residential accommodation. AN Checker asserted that a component of those
supplies comprised the installation of energy-saving materials.
3. The appeal was designated as a lead case pursuant to rule 18 of the Tribunal
Procedure (First-tier Tribunal) (Tax Chamber) Rules 2009 (SI 2009/273). The common
or related issues of fact or law were:
“Whether the supply of the installation of energy saving materials
together with services of installation of boiler and other central heating
products is a single supply subject to [a] single rate of VAT or is a single
supply subject to two or more different rates of VAT or, in the
alternative, are two or more separate supplies subject to different r ates
of VAT.”
4. The First-tier T ribunal (Judge Nicholas Paines QC) dismissed the appeal by a
decision given on 24 September 2013 ([2013] UKFTT 506 (TC)) determining at [48] the
rule 18 issue as follows:
“The supply of the installation of energy saving materials together with
services of installation of a boiler or of a central heating system is a
single supply subject to a single rate of VAT at the standard rate.”
5. Later that year the FTT granted permission to appeal against its decision.
6. The parties then agreed that the appeal should be stayed behind an appeal to the
Upper Tribunal in Colaingrove v HMRC ([2015] UKUT 80 (TCC)), a case that concerned
Group 1 of Sch.7A to VATA 1994 and the extent to which a component of a single supply
could benefit from a reduced rate of VAT. The stay was continued when the Upper
Tribunal’s decision was in turn appealed to the Court of Appeal ([2017] EWCA Civ 332)
(“Colaingrove (CA)”). The Court of Appeal upheld HMRC’s assessments.
Relevant VAT legislation
7. Article 12(3)(a) and Annex H(9) of Council Directive 77/388/EEC (“the Sixth
Directive”) conferred on member states a power to apply reduced VAT rates to the
“supply, construction, renovation and alteration of housing provided as part of a social
policy”. The relevant provisions of the Sixth Directive were re-enacted as Article 98 and
Annex III(10) of Council Directive 2006/112/EC (“the PVD”).
8. In exercising the power to derogate from the ordinary VAT system, the UK
Parliament conferred relief in July 1998 in respect of the installation and supply of
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