BAILII
British and Irish Legal Information Institute


Freely Available British and Irish Public Legal Information

[Home] [Databases] [World Law] [Multidatabase Search] [Help] [Feedback]

United Kingdom VAT & Duties Tribunals Decisions

You are here: BAILII >> Databases >> United Kingdom VAT & Duties Tribunals Decisions >> Ashley Dennison v Customs and Excise [2004] UKVAT V18733 (17 August 2004)
URL: http://www.bailii.org/uk/cases/UKVAT/2004/V18733.html
Cite as: [2004] UKVAT V18733
[New search] [Printable RTF version] [Help]
Ashley Dennison v Customs and Excise [2004] UKVAT V18733 (17 August 2004)

    18733

    VAT- ZERO RATED SUPPLY – PERSON WITH DISABILITY – supply of French doors and windows- was the supply connected with the service of zero rated construction works – no because the Respondents made an error in zero rating the construction works – Appeal dismissed ( paragraphs 6.5 and 6.9 VAT Notice 701/7).

    LONDON TRIBUNAL CENTRE

    MR LEE ASHLEY DENNISON Appellant

    - and -

    THE COMMISSIONERS OF CUSTOMS AND EXCISE Respondents

    Tribunal: Michael Tildesley (Chairman)

    Keith Dugdale FCA (Member)

    Sitting in public in Lowestoft on 23 March 2004

    The Appellant appeared in person

    Andrew O'Conner Counsel for the Respondents

    © CROWN COPYRIGHT 2004

     
    DECISION
    The Appeal
  1. The Tribunal released its decision in respect of this Appeal on 24 May 2004 under decision number v/18619. The Tribunal, however, considered that it could not do justice to a particular aspect of the Appeal relating to the concession under paragraph 6.5, of VAT Notice 701/7 "VAT Reliefs for Disabled People" without further information. The Tribunal, therefore, issued the following directions:

    2. A. The Respondents to provide written submissions and arguments on the following points to the Tribunal and to the Appellant by no later than the 1 June 2004:

    • The jurisdiction of the Tribunal to deal with issues of liability to VAT decided by the Respondents based upon paragraph 6.5 of Notice 701/7.
    • Did the advice of Mrs Benewith contained in her letter of 18 November 2002 constitute a ruling by the Respondents that the restoration of the dining room in Crumb Cottage was eligible for zero rating for VAT?
    • Does the word "restoration" incorporate the installation of French doors and adjoining windows in place of the former patio doors in the dining room?

    B. The Appellant may submit a written response to the Respondents' submissions to the Tribunal and to the Respondents by no later than 15 June 2004.

    C. The Tribunal will determine the matter in dispute if required by no later than the 15 July 2004 without the need to re-convene the hearing.

  2. The original timetable for the directions was not met through a variety of reasons. The Tribunal of its own motion fixed a new date of 17 August 2004 to determine the matter in dispute without the need for a further hearing.

  3. The Tribunal has considered the written representations of the parties.

  4. Our findings of fact were set out in the earlier decision ( v/18619).

    5. The Issue
  5. VAT Notice 701/7 "VAT Reliefs for Disabled People" issued August 2002 paragraph 6.5 states that

    6. "Where economy and feasibility dictate that you have constructed or extended in the course of a zero-rated supply, and have occupied space which was previously part of another room then you may also zero-rate the service of restoring that room elsewhere in the building to its original size. This is because the work is essential to providing the service to your disabled customer".
  6. Under paragraph 6.5 of Notice 701/7 where a supplier has constructed or extended in the course of a zero rated supply and by doing so occupied space which was previously part of another room, then the service of restoring that room elsewhere in the building to its original size is itself a zero rated supply. In this Appeal the enlarged hall took up some of the original dining room space which required the building of new dining room to compensate for the space lost. Mr Dennison gave evidence that the old dining room had patio doors on the side now facing the new bedroom and a window at the rear. Mrs Benewith of the Respondent's National Advice Service in a letter dated 18 November 2002 accepted that the restoration of the dining room to its original size would qualify for VAT zero rating.

  7. The issue was whether the installation of the French doors and adjoining windows in the dining room by Harmony Home Improvements Ltd would qualify for zero-rating on the ground that it formed part of the service restoring the dining room elsewhere in the building to its original size.

    8. The Respondents' Submissions
  8. The Respondents accepted that the Tribunal had the jurisdiction for the purposes of this Appeal to make a finding about whether the installation of the French doors and adjoining windows fell within the terms of paragraph 6.5 of Notice 701/7.

  9. The Respondents denied that the advice of Mrs Benewith about the dining room in her letter of 18 November 2002 constituted a ruling on the VAT treatment of the dining room. They pointed out that the Commissioners in any event only provide VAT rulings to the makers of a supply not the receivers of a supply such as Mrs Dennison.

  10. The Respondents' main contention, however, was that the concession of zero-rating under paragraph 6.5 of Notice 701/7 applied to the "the service of restoring the dining room" not the supply of any associated goods. In this Appeal the supply of the service of restoring the dining room was made by MD Constructions which was zero-rated in accordance with the concession under paragraph 6.5. The supply of the new French doors and windows for the dining room was a supply of goods made to the Appellant by Harmony Home Improvements Ltd and as such was plainly not within the scope of the concession at paragraph 6.5.

  11. The Respondents' final point was that "restoration" did not include the replacement of the former patio doors in the dining room with the new French doors because of the requirement to construe strictly the wording of paragraph 6.5. Respondents' Counsel stated that the key words were "restoring that room … to its original size". In his opinion the "words" mean what they say. They cannot be read as including the process of fitting doors in the new room similar to those that had been present in the old room, or decorating the new room in a similar colour to the old.

    12. The Appellant's Submissions
  12. The Appellant in his letter of 20 July 2004 challenged the Respondents' assertion that MD Constructions had been allowed to zero-rate the construction of the new dining room because of the concession under paragraph 6.5 of Notice 701/7. The Appellant pointed out that the new dining room was larger than the original one. The Appellant, therefore, concluded that the patio doors and windows qualified for zero-rating because they were designed solely for use by a disabled person. Paragraph 4.5.1 of Notice 701/7 permitted the zero rating of the supplies of such goods.

  13. The Appellant then referred to paragraph 6.9 of Notice 701/7 which stated that

    14. "If you supply goods such as building materials in connection with your supply of the services described in paragraphs 6.2 – 6.6, you may zero rate those goods provided that the construction services in question are properly eligible for zero-rating.
    When the relevant building materials or other goods are purchased by a disabled person or charity themselves for use by their building contractor, a builders merchant or similar can zero-rate their supply of goods only if they are happy that the actual building work will qualify for zero-rating and can demonstrate that subsequently to visiting officers".

    The Appellant sought to argue that the purchase of the French doors and windows from Harmony Home Improvements Ltd was equivalent to the purchase from the builders merchant mentioned in paragraph 6.9. Further the patio doors were designed with an internal level access allowing Mrs Dennison to take advantage of the external ramp into the garden.

  14. The Appellant in a further submission dated 28 July 2004 referred to the concession under paragraph 6.2 of VAT Notice 701/7 which permitted zero-rating of the service of constructing a ramp or widening an existing doorway. The Appellant went onto explain that it was necessary to widen the dining room and the original door to allow for wheelchair access.

    15. Our Decision
  15. We are concerned solely with the issue about whether the concession under paragraph 6.5 of Notice 701/7 can apply to the supply of the dining room French doors and window by Harmony Home Improvements Ltd.

  16. We have already decided the following matters in our earlier decision issued on 24 May 2004:

    17. a) The French doors and windows supplied were not designed solely for use by a handicapped person in accordance with item 2(g) Group 12 Schedule 8 of VATA 1994.
    b) The French doors and windows supplied were not parts and accessories designed solely for use in or with goods which themselves qualify for VAT relief in accordance with item 2(h) Group 12 Schedule 8 of VATA 1994.
    c) The French doors and windows did not constitute a supply to a handicapped person of services of adapting goods to suit her condition in accordance with item 3 Group 12 Schedule 8 of VATA 1994.
    d) The French doors and windows supplied did not involve widening doorways or passages for the purpose of facilitating Mrs Dennison's entry to or movement within her private residence in accordance with item 8 Group 12 Schedule 8 of VATA 1994.

    Thus the Appellant's further submissions regarding the concessions under paragraphs 3.1, 4.5.1, 4.5.2, and 6.2 of VAT Notice 701/7 were dealt with by our earlier decision which dismissed his Appeal on these matters.

  17. Paragraph 6.5 consists of four distinct elements, all of which must be met in order for the construction work to qualify for zero-rating. They are:

    18. a) occupied space which was previously part of another room in the course of a zero-rated supply
    b) the service of
    c) restoring that other room elsewhere in the building
    d) to its original size.
  18. The word "restoration" in relation to construction work is defined by the Oxford English Dictionary, 2nd edition, as "The process of carrying out alterations and repairs with the idea of restoring a building to something like its original form, a general renovation". The Concise Oxford Dictionary, 7th edition defines "Restore" as "bring back to original state by building or repairing". Respondents' Counsel has argued that "restoring" the room did not include the process of fitting doors and windows, which in his view were akin to the fitting of lights and redecoration of the room. We consider that his interpretation is too restrictive. In our view the restoration of the room to something like its original form would include the installation of a window and a French door provided they were in the original room because they are integral parts of that room and materially different from fixtures and fittings, such as lights. Thus the installation of the French door and adjoining window in the new dining room falls within the process of " restoring the room" as defined by paragraph 6.5.

  19. The zero-rating concession under paragraph 6.5 is limited to the service of the construction works not the supply of goods (French door and adjoining window) in connection with those works. The Appellant, however, has drawn the attention of the Tribunal to paragraph 6.9 which permits the zero-rating of supplies of goods provided they are connected with the construction works. We consider that the supply of the patio door and adjoining window for the dining room is capable of falling within the concession under paragraph 6.9 provided all the other conditions in paragraph 6.5 are met.

  20. Counsel advised us that the Respondents zero-rated under the paragraph 6.5 concession the construction works carried out by MD Constructions in respect of the dining room. The Appellant, on the other hand, has informed us that the new dining room was bigger than the original dining room. Thus the Respondents' decision to zero rate the construction works of the dining room would appear to be in contravention of the requirements of paragraph 6.5 because the room was not restored to its original size. This has placed the Tribunal in a dilemma. Before deciding whether the supply of the French door and adjoining window in the dining room can qualify for zero-rating under paragraph 6.9, we have to be satisfied on the facts that the construction works in the dining room were properly eligible for zero-rating under paragraph 6.5. We cannot be so satisfied because the new dining room was larger than the original one. In those circumstances we consider that to allow the Appellant's appeal on the basis that the supply of the French door and the adjoining window to the dining room should be zero-rated under paragraph 6.9 would compound the error committed by the Respondents in respect of the 6.5 concession for the dining room. We, therefore, dismiss the Appeal in relation to the supply of the French doors and patio in the dining room. There will be no order for costs.

  21. This decision should be read in conjunction with the decision released on 24 May 2004 under number v/18619. We noted in that decision the Respondents indication that they would honour the concession given in respect of the front door. We trust that the Respondents will likewise honour the concession already granted for the construction works of the new dining room.

    22. MICHAEL TILDESLEY
    CHAIRMAN
    RELEASED: 17 August 2004

    LON/03/399

About BAILII - FAQ - Copyright Policy - Disclaimers - Privacy Policy amended on 25/11/2010