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United Kingdom VAT & Duties Tribunals Decisions
You are here: BAILII >> Databases >> United Kingdom VAT & Duties Tribunals Decisions >> Collins and Beckett Ltd v Revenue and Customs [2005] UKVAT V19212 (9 August 2005)
URL: http://www.bailii.org/uk/cases/UKVAT/2005/V19212.html
Cite as: [2005] UKVAT V19212
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- The Appeal before the Tribunal is that of Collins and Beckett Limited against a decision of the Commissioners (set out in a letter from them dated 19 December 2003) that work carried out at the property known as Carldane Court Much Hadham was not a supply in the course of an approved alteration of a protected building within Item 2 of Group 6 of Schedule 8 to the Value Added Tax Act 1994 ("VATA"). The consequence of the decision is that the work is not zero rated for value added tax purposes. The Appellant submitted that the 19 December 2003 assessment to tax and interest in the total amount of £94,008.70 relates to a supply which it considers to be zero rated on the basis that the supply was made in the course of an approved alteration of a protected building within Item 2 of Group 6 of Schedule 8 to VATA.
- The Appellant is the building company which carried out the disputed work at Carldane Court. We heard oral evidence from Simon Patrick Howard-Dobson. Mr Howard-Dobson is principal partner of Patrick Howard Design Associates ("PHD"). PHD were employed by the owners of Carldane Court to advise them in connection with a design concept involving a "pool complex" at Carldane Court.
- The effect of Section 30 of VATA is that if a supply falls within Item 2 of Group 6 of Schedule 8 of VATA ("Item 2") it is zero rated. Various Notes apply for the interpretation of Group 6.
- It is common ground that Carldane Court is a residential grade 2 listed building and is a "protected building" within the meaning given to that expression by Note (1)(a) to Group 6 of Schedule 8 of VATA. Two of the other notes to Group 6 are also relevant.
- First, the relevant part of Note 6(c) provides that "approved alteration" means:-
- Secondly Note 10 provides that "for the purposes of Item 2 the construction of a building separate from, but in the curtilage of, a protected building does not constitute an alteration of the protected building".
- During the evidence of Mr Howard-Dobson the Tribunal was shown almost thirty photographs to illustrate what he told us about the work done at Carldane Court.
- Carldane Court is a Grade 2 listed building described fully in the statutory listing and is owned by a Mr and Mrs Gordon Morrison. The listing does not mention any swimming pool facilities.
- At some time (believed to be 1988) a former open air swimming pool to the east of the house had been covered by an industrial greenhouse of aluminium and plastic construction. Listed building consent for that construction was never obtained. It seems to be agreed that, because it had been in existence for in excess of ten years by the time the disputed works were contemplated, it was by then deemed to have consent by virtue of the failure of the local planning authority to take an enforcement action. The structure was not physically connected to the house at any time.
- On 22 July 1998 Hertfordshire County Council had granted listed building consent for works to be carried out at Carldane Court described in the consent as "rebuilding swimming pool enclosure and pedestrian link to house". The consent was subject to several conditions including that "notwithstanding the consent hereby granted, none of the timbers forming the structural frame of the building shall be cut removed or otherwise altered without the prior consent in writing of the local planning authority". The reason given for this condition was "to ensure the historic and architectural character of the building is properly maintained". This consent had been obtained prior to the involvement of PHD. No work had been done in reliance on this consent when PHD were first consulted by the owners of Carldane Court about this project.
- Mr Howard-Dobson told us that the owners' brief to PHD was to find a means of bringing the pool complex "into the house" and of making it fit in with the house itself. PHD put forward a proposal and planning and listed applications were submitted and registered by the local authority in September 2000. After some period of consultation, on 8 March 2001 PHD obtained consent described as "minor extensions and extensions to swimming pool building plus remodelling of façade. Amendment to glazed link already approved". The March 2001 consent included conditions - including the one specified in the 1998 consent and already described above concerning the timber frame structure.
- During the construction works a window in the northern range of the house was closed and a new doorway was formed. This doorway led into a passage. The roof in this part of the house was altered. The previous pitched roof was replaced in part with a flat roof and the brick work was extended to form a parapet edge to the remaining pitched and new flat roofed elements. This form then continued over the connecting passage way and onto the leisure complex. The new works were constructed on piled foundations designed to preserve mature trees and these foundations were extended so as to underpin the corner of the house where the passage way connects to it. The design of the new glazed corridor which connects the house to the leisure complex was based upon a glazed corridor which was already a feature of the house and described in the listing.
- The old "greenhouse structure" was demolished and all the pavings were removed. The original pool had a Roman end which was removed and the pool was squared off. The pool tank was retained. The pool complex itself is a basic rectangular shape (similar to the original "greenhouse" building) but it also features pavilion detailing (not a feature of the previous building) all of which is bricked to a low level with rendered and glazed walls above. The rendered areas have pargetting similar to the pargetting on the original house. The visible roofs are of lead and match other lead areas of the house in material and construction detail. The house has half timbered black and white elements and the joinery and glazing used in the construction works is of a black and white effect.
- The pool complex itself contains a large sitting and dining area complete with a modern finish; it contains a small kitchenette and bar and full entertainment package of sound and light systems and cinema as well as a sanarium and exercise area and, of course, it includes the pool which utilised the pre existing pool tank.
- The leisure complex can be reached directly from the original house since the new glazed passage leads out of the newly constructed door from a room in the house described as a small library and connects at the other end to the complex. There are also doors which lead directly into the garden both from the new glazed passage and from the new complex. The glazed corridor is sufficiently wide to accommodate seating and items of furniture but the photographs showed it to have the general appearance of a corridor rather than of a conventional room.
- During the course of the works, it was necessary to cut into the timbers of the original structure and because of the condition attaching to the listed building consent and covering this type of work, further consent was needed and was obtained before this was done.
- The Appellant argued that all the construction services in question were supplied in the course of an approved alteration of a protected building falling within Item 2. It was submitted that neither Note 6 nor Note 10 affects the application of Item 2 because the works were works of alteration and not of repair or maintenance and did not involve the construction of a separate building. The works could not have been carried out without consent which was duly obtained. Although the structure of the original house was not very much disturbed by the works the house was altered and Mr Baldry referred to two cases as relevant to the meaning of "alteration" which he submitted means in the context of item 2 any alteration to the fabric of the building which is not slight or trivial. What was done was, applying ordinary English, clearly an alteration. The listed or protected building was altered by the addition of a new structure which was not a separate building and we were referred by him to a case with similar facts in support of this. And, finally, because of the provisions of section 1(5)((a) Planning (Listed Buildings and Conservation Areas) Act 1990 and since the new work was joined to the listed building, the original house plus the work done was together treated as a listed building. Although Mr Baldry referred us to a number of cases his argument was that, in a case such as this, the authorities are not directly helpful either because the individual facts were so important to the decision in each case or because although the authorities concerned the interpretation of the same word, that word had been used in a slightly different context.
- The Commissioners, on the other hand, say that the work was not an alteration but constituted the reconstruction or alteration of the 1988 "greenhouse" structure. This was not part of the listed building and no part of section 1(5) Planning (Listed Buildings and Conservation Areas) Act 1970 applied to treat it as such. They say that previous case law does not support a different conclusion and that each case must be decided on its facts. The new passage merely links the two buildings. With respect to the new passage they say that the alteration to the house is not to change it in a meaningful way so that work on the passage is standard rated and is therefore not an alteration contemplated in Public Notice 708 (section 9.3). They accept that the work to the house in creating the access to the passage is an alteration within item 2 and have allowed that work to be zero rated.
- And so Mr Baldry submitted that, although in this case the word "alteration" does not appear between the words "construction" and "demolition" as it did in Item 2 of Group 8 of Schedule 4 of Finance Act 1972, these cases are nonetheless helpful in the interpretation of the word "alteration" in the present context. If that is so there is an alteration where the work is not de minimis and involves alteration to the fabric of the building. In particular he urged us that (provided it was not de minimis) it was not appropriate to concentrate on the nature or extent of the alteration to the fabric of the original building because an extension is a clear example of an alteration and wherever there is an extension the original building its fabric will be altered to varying degrees He referred to Section 9.3.12 of Notice 708 which gives an extension as an example of the word alteration. Instead to form a view of what has been done he argued that it is necessary to look at the whole structure and consider the final effect. If that approach is adopted in this case the final effect is of one continuous structure and on the ordinary meaning of the word he urged us to find that this was clearly an alteration.
- The Commissioners disagreed with this approach. On the question whether an alteration had taken place Ms Rahman conceded that the Commissioners had applied zero rating to the work done on the original building with the result that this must have been an alteration. In relation to the work on the glazed corridor she referred to section 9.3 of Notice 708 which provides that an alteration must change the structure in a meaningful way. And in relation to the pool complex itself the Commissioners argument was that this was the alteration or reconstruction of the 1988 building and that building was a separate building and was not treated as part of the listed building by section 1(5)(b) of the Planning (Listed Buildings and Conservation Areas) Act 1990 since it was a separate building that did not form part of the land since before 1 July 1948. Work done to that separate building was not work done to a protected building and that cannot be made into a protected building by a link for these purposes back to the original protected building so that it joins that building and falls within section 1(5)(a) of the 1990 Planning Act.
- Works of alteration which otherwise satisfy Item 2 do not qualify for zero rating if what is done amounts to the construction of a separate building because of Note 10. Mr Baldry referred the Tribunal to the case of Customs and Excise Commissioners v Arbib [1995] STC 490 in support of his argument that Note 10 did not apply in this case.
- In Arbib the question for the Tribunal did involve whether a separate building was constructed. In that case, a swimming pool building was connected via a red brick wall at the back of the building in question and by a covered walk way which was covered at the top and open at the sides. In finding that the Tribunal Chairman had not erred in deciding that the swimming pool building was not a separate building, Latham J, having agreed upon the dangers of using a dictionary definition of a particular word as an aid to construction, went on to approve as sensible what the Chairman said in that case "the fact that the Commissioners would accept the building as an extension of the existing building if the walk way were enclosed on both sides is an indication of how narrow the dividing line is between those cases they consider come within the provision and those that fall outside". "
- Mr Baldry argued that the conclusion in Arbib (where the walk way was less substantial than the glazed corridor in the present case) strongly supported a finding here that Note 10 did not apply. He accepted that a concession made in Arbib (that if the walk way had been fully enclosed the Commissioners would have accepted that the swimming pool formed part of the original building) is not binding here. Nonetheless he did feel this concession supported what he saw as the common sense conclusion that no separate building had been constructed in the present case particularly since he described the new structure as "welded to" Carldane Court because the appearance of the new structure was designed so that it appears purely as an extension of it.
- In his submission Mr. Baldry felt that the recent case of Customs and Excise Commissioners v Zielinski Baker & Partners Limited [2004] UKHL 7 was not relevant or unhelpful to his case. In that case there were two existing buildings, a dwelling plus a separate barn. These were together treated as a single listed building for the purposes of the planning legislation because the barn pre-dated 1 July 1948. The barn was altered. The question at issue was whether alterations to the separate barn were an "approved alteration of a protected building". The tax payer argued that the single "deemed building" had been altered. In allowing the Commissioners appeal in that case it was held that the word "protected building" was defined by note 1 to Group 6 of Schedule 8 to the 1994 Act as being "a building" which was "designed to remain as or become a dwelling place" after the alteration and which was a "listed building" within the meaning of the 1990 Act; that those requirements were cumulative; that although the barn might be a notional listed building for the purposes of the 1990 Planning Act it was not going to become a dwelling within the meaning of Group 6 but a changing and games room; and that that accordingly, the barn was not a "protected building" for the purposes of Group 6 and the cost of work done on it was subject to VAT at the standard rate.
- Mr Baldry submitted it was irrelevant here that the new pool complex was not to become a dwelling. In Zielinski Baker only the barn was altered: the building which was the dwelling was not altered. In the present case the 1988 building was not deemed to be the protected building and it was not altered - it was demolished. And so, he said, the case of Zielinski Baker has not affected the earlier decisions to which he had already referred nor does it provide an answer in this case. In this case the alteration is to the dwelling house and not to the pre-existing swimming pool building which was completely knocked down. The building works altered Carldane Court; it is dramatically altered by the complex and there is an extension by way of a corridor out of the old building into the new complex.
- He did refer briefly referred to Section 1(5) (a) of the Planning (Listed Buildings and Conservations Areas) Act 1990 which provides that for the purpose of that Act any structure fixed to a building becomes part of it so that the listed building after the works were completed now includes what has been added to it.
- The conclusion of this was, he argued, that works of alteration took place and were constituted by the whole of the works and not merely by the joining up works. What was created was an extension. Any extension has a part which touches the original building and part which does not but this does not prevent an extension being an alteration. The extension is not a separate building and that is more obviously the case here than it was in Arbib. Each case must be considered on its facts and, although the dividing line (between what is and what is not a separate building) is narrow, this work in this case is clearly an example of the construction of an extension and not a separate building.
- Ms Rahman's main submission was that the house at Carldane Court was not altered by the work to the pool complex. It was the 1988 building that was altered. This was a separate building the construction of which would have fallen clearly within Note 10. The case of Zielinski Baker illustrates that alterations to a separate structure do not qualify for zero rating and this case is no different merely because there is a new passage which links back to the house. That substantial, separate, building was what was altered and the altered, separate, building could not be made into an alteration of the listed building merely by linking back to the listed building and providing an access to it via the linkage. In relation to any section 1(5) argument that the position is different here because the original building and the works together constitute a protected building because of the connection to the original building Ms Rahman submitted that the protected building as defined in Group 6 Schedule 8 to VATA is the old building. She postulated that this was the only sensible view because otherwise any work which created additional building or any number of additional buildings joined to the protected building would constitute an alteration merely because the new building thereafter formed part of the original building. Surely, she said, that cannot be correct.
- Ms Rahman accepted that there was some alteration to the house itself and that the Commissioners had applied zero rating to that work. That, she said, was the only alteration that was capable of zero rating. The pool complex was the alteration of an old but not protected building and the glazed corridor was not an alteration of the protected building because it did not affect the structure of Carldane Court in a meaningful way. Ms Rahman acknowledged that the consent referred to all the work that was done but drew to our attention the wording of the original planning permission obtained before PHD submitted the revised plans. That original planning permission described what was proposed as "rebuilding swimming enclosure". Whilst the Commissioners accept that listing building consent was obtained they suggested that this consent was limited in view of the condition which provided that none of the timbers forming the structural frame of the building should be cut, removed or otherwise altered without the prior consent in writing of the local planning authority. It was not entirely clear exactly what point was being made in relation to this consent and after some debate Ms Rahman appeared to acknowledge that consent had been given for all the work so that it was capable of being an approved alteration for Item 2 purposes - if the works were, in turn, works of alteration for Item 2 purposes.
- Ms Rahman dealt with the possibility that there was not any alteration to the 1988 structure but that it was in fact rebuilt. The work involved the construction of a building separate from the house and it could not fall outside Note 10 merely because it is linked back to the house via the glazed passage. Whilst Ms Rahman accepted there are some similarities between this case and that of Arbib she reminded us of what was said by Latham J on page 493 "this indicates to me that the Chairman was directing herself sensibly to the resolution of a very fine distinction. Whether every Tribunal would have come to the same conclusion is another matter. But I cannot say that the Tribunal was unreasonable in approaching it the way that this Chairman did nor can I say that she reached a perverse conclusion." And she went on to say that the facts here are different from the facts in Arbib which involved two structures dating from the same or similar periods. Arbib must be considered against this background. Further, it was a case which considered, in the High Court, whether the Tribunal decision was reasonable. It does not provide authority for the proposition that every structure linked to the original structure by a covered walk way amounts to an extension to the house. The Tribunal was urged to consider the facts of this particular case and what was done at Carldane Court itself, and, having done that, to find what had been created was a separate building to which Note 10 applies so that the disputed works were standard rather than zero rated.
- In reply to this Mr Baldry urged the Tribunal to apply common sense to what had been done, to look at the photographs both before and after the works had been carried out, to consider the evidence of Howard Dobson and to conclude that there was an alteration which resulted in a single structure so that the works fell outside Note 10 and qualified in full for zero rating. In particular he said that the 1988 structure had neither been altered nor rebuilt. This simply did not accord with the facts. It had been demolished - not altered at all.
- As the Tribunal observed in Arbib the dividing line in these cases is narrow. We looked carefully at what was done which was fully illustrated by the photographs produced to us.
- At the outset we must say that our immediate impression from the photographs was of two buildings linked together by the glazed corridor. The glazed corridor was primarily a passage between two buildings that would have been substantially the same if the corridor had not been built. The corridor was generously proportioned and could function as a seating area as well as providing access between the house and the pool complex but it is rather unlikely that it would have been constructed if there had been no pool complex at the end of it.
- We can follow the Commissioners argument that the work might be split into three parts. In no particular order these are the construction of the pool complex, the alterations to the house and the construction of the glazed corridor. This caused us to speculate what the result might have been if the works had been carried out at different times. Suppose, for example, that the pool complex had been built on a stand alone basis. If that had been done, the construction work would not have been an alteration to the house - the fabric of the house would not have been touched. And if the protected building was not altered Note 10 is irrelevant. If the protected building was altered Note 10 would apply; the work would plainly result in the construction of a separate building. The work would have been standard rated. If the works to the house structure itself had been carried out it is likely that this work would have been , as is the case here, an approved alteration to the house falling within Item 2 and zero rated as a result. Even if these two lots of work (the construction of a stand alone pool complex and the works to the house) had been carried out at the same time it is unlikely that the works to the house would have caused the construction of the complex to be regarded as an alteration to the house although the existence of Note 10 does means that the construction of a separate building might otherwise fall within item 2 as an alteration to a protected building. Of course, if that was the result of our hypothetical example then Note 10 would prevent work carried out to construct a stand alone pool complex from falling within Item 2. And if the corridor was added at some later stage this might or might not have been an approved alteration to the house but it would certainly not alter the treatment of any earlier construction works on the pool complex.
- We can see the force of Ms Rahman's argument that it is a curious result if work which would not, on its own, fall within Item 2 ( either because it is not an alteration at all or because of Note 10) should fall within it merely because of the passage. And so it is the passage which creates the uncertainty because it is the passage which makes it difficult to say that the house has not been altered and more so to say that the pool complex is a separate building. And no doubt it is for that reason that Ms Rahman put forward the argument that it was the 1988 building that was altered; if the 1988 building and not the house had been altered the difficult issue of what is a separate building is avoided. That issue is even easier to avoid if the corridor is not treated as an alteration to the house.
- We do not agree the 1988 building was altered. The building was demolished. Although the pool tank was utilised we do not regard this fact as sufficient to support a conclusion that the building was altered. It is certainly easier to argue that the 1988 building was rebuilt but the facts do not support that either. A new pool complex was built. This means we cannot avoid the difficult questions whether all or part of the disputed work was an alteration of the original house and, if so, whether it involved the construction of a separate building.
- Consent was obtained for the work and according to the Planning Act in question consent is needed only if the proposed work is an alteration. Confusingly the consent referred to an alteration of the pool building. We decided that whilst, if the work otherwise fell within Item 2 the consent means that the alterations were approved, we should not rely on the wording of the consent which was obtained to determine either whether, for VAT purposes, the work constituted an alteration or whether, if it did constitute an alteration, it resulted in the construction of a separate building. There was some evidence that the description used was not the subject of technical analysis and should not be regarded as the considered view of the issuer as to the nature of what was proposed.
- The Commissioners agree that some limited amount of work did constitute an alteration to Carldane Court within Item 2. Because all the work is connected back to the house it is more difficult to accept the Commissioners' argument that some of the work does and some does not amount to an alteration of Carldane Court. The cases of ACT and Viva Gas did not really assist. They both concerned what type of work carried out directly to a building constituted an alteration; the work closely involved the building itself and there was no extensive external work carried out as there was in this case. It is agreed that what was done directly to Carldane Court was an alteration. And in the ordinary sense of the word Carldane Court was altered as a result of all the works. It now has a glazed corridor joined to one side of it and that corridor leads to the pool complex. That is different from what was there before when there was a separate building in the garden and no glazed corridor. We accept the Appellant's argument that, so long as the work is not de minimis, the fact that relatively little of the work is done to the house itself is not fatal to a finding that there is an alteration to the protected building falling within item 2. If, the Commissioners accept, and it seems from section 9.3.12 of Notice 708 they do, that an extension is an example of an alteration it cannot be the case that only an extension involving substantial work to the fabric of the original building can qualify and the reference to an alteration requiring the change to be in a meaningful way in Notice 708 does not necessarily imply that substantial work must be carried out to the original building itself.. The Appellant says that the effect of all the work was to create an extension. The Commissioners, on the other hand, say that this was not the effect. We have already rejected the proposition that the 1988 building was altered or rebuilt. Whilst there is the possibility that neither the 1988 nor the house was altered as a result of the work we have concluded that Carldane Court was altered by what was done. This leaves the possible application of Note 10 - was the effect of the disputed work to create a separate building rather than, as the Appellants argue, an extension? Note 10 envisages that an alteration falling within Item 2 might involve the construction of a separate building. "Separate" in this context means separate from the protected building. We can see that in one sense the pool complex can be described as not separate because it is joined to the passage which in turn is joined to the house but the pool complex may also be described as separate from the house although linked to it by the passage. Visually we prefer the second interpretation. Our conclusion is that, having formed that conclusion the Commissioners' argument that a building which is essentially separate from the protected building cannot be taken outside Note 10 by some link back to the protected building is persuasive. And so we have concluded that the pool complex is a separate building albeit one which is physically linked to the house by the passage. On that basis the work to construct it does not fall within item 2 because of Note 10.
- This leaves that part of the disputed work which relates to the construction of the passage. The passage joined the house and the work which is acknowledged to have been an approved alteration falling within Item 2 was carried out in order to facilitate this. We have concluded that the disputed work was in fact an approved alteration of Carldane Court and it is only the provisions of Note 10 that prevent the work to the complex being within item 2. It is only if the separate building includes the passage that Note 10 will also apply to exclude the work on the passage from item 2 and we do not believe that it does. And so we consider that the work done to construct the passage does fall within Item 2 and should be zero rated and to that extent we allow the appeal. We find that the work done in relation to the complex falls within Note 10 and therefore falls outside Item 2 and in relation to that work we dismiss the appeal and make no order as to costs.
19212
Protected Building – work done in relation to listed building and pool complex - whether zero rated as approved alteration - Item 2 of Group of Schedule 8 VATA 1994 - Did work create separate building - in part yes - to that extent appeal dismissed.
LONDON TRIBUNAL CENTRE
COLLINS AND BECKETT LIMITED Appellant
THE COMMISSIONERS OF CUSTOMS AND EXCISE Respondents
Tribunal: Judith Powell (Chairman)
Tym Marsh (Member)
Sitting in public in London on 31 March 2005
Rupert Baldry of Counsel for the Appellant
Shaheen Rahman of Counsel for the Respondents
© CROWN COPYRIGHT 2005
DECISION
Introduction
The Statutory Provisions
Item 2 provides as follows:-
"The supply, in the course of an approved alteration of a protected building, of any services other than the services of an architect, surveyor or any person acting as consultant or in a supervisory capacity".
"…..works of alteration which may not …. be carried out unless authorised under, or under any provision of ….. Part 1 of the Planning (Listed Buildings and Conservation Areas) Act 1990…..and for which, …. consent has been obtained under any provision of that Part but does not include any works of repair or maintenance, or any incidental alteration to the fabric of a building which results from the carrying out of repairs, or maintenance work."
The Facts
Arguments
Alteration
19. ACT Construction Limited v Customs and Excise Commissioners [1981] 1WLR 1542 involved the construction of the word "alteration" in Item 2 of Group 8 of Schedule 4 to the Finance Act 1972. Item 2 of that Group concerned the "construction alteration or demolition" of any building. In that case note (2) provided that "Item 2 does not include - (a) any work of repair or maintenance". The disputed work in ACT involved underpinning operations to a number of houses which consisted of the construction of an additional foundation to each affected building. The question in that case was the type of work that amounted to "alteration". Lord Roskill approved the approach of Neill J in Customs and Excise Commissioners v Morrison Dunbar Limited [1979] STC 406 where, in the same context, he held that the word "alteration" is an alteration of the building and therefore one which involves some structural alteration. Mr Baldry, acknowledged that the context in which the word "alteration" appeared in Finance Act 1972 was different to the present case but submitted that this did not justify a different meaning being given to it and that the work involved some structural alteration of the original house at Carldane Court which was manifestly altered by it.
20. Customs and Excise Commissioners v Viva Gas Appliances Limited [1983] 1WLR 1455 the extent of the work covered by the word "alteration" was considered. It was decided that the word "alteration" in the context of Item 2 Group 8 Schedule 4 to Finance Act 1972 "covered all works to the fabric of an identified building which fell short of complete erection or complete demolition; that "alteration………of any building" within the meaning of the Item in that Group included "any alteration to the fabric of the building save that which was so slight or trivial that its existence could be ignored under the de minimis rule;" and at page 1449 Lord Diplock said:-
"Pearlman v Keepers and Governors of Harrow School [1979] QB56 was cited in argument in Customs and Excise Commissioners v Smitmit Design Centre Limited [1982] STC 525 a decision of Glidewell J reached after the judgment of this house in the ACT Construction case. Glidewell J accepted that the alteration must affect the structure of the building to some material extent - by which I take it he meant that the effect upon the structure must not be so slight or trivial that the Court is obliged to ignore its very existence under the rule of law expressed in the Latin maxim de minimis non curat lex. Glidewell J however went on to lay down a further criteria borrowed without acknowledgement from Geoffrey Lane LJ's judgment in Pearlman -v- Keepers and Governors of Harrow School [1979] QB56. Secondly, he said [1982] STC 523, 534): "the alteration must be substantial in relation to the building as a whole". He gave no reason for this proposition which was clearly intended to lay down a test for qualifying for zero rating under item 2 that was more difficult to satisfy than that which the de minimis rule itself imports. Forbes J in the instant case was unable to find any warrant for the imposition of this second and more severe criteria in the statutory words in item 2. Nor, with respect can I. If the alteration to the fabric of the building satisfies the de minimis rule I can see no reason why it should not fall within the statutory description "alteration….. of any building" whether the extent to which it falls outside that rule be great or small".
Separate Building
Conclusion
JUDITH POWELL
CHAIRMAN
RELEASED: 9 August 2005
LON/O4/100