THE TAXMAN has said that it will continue its policy of excluding roller blinds and other “window furniture” from the zero rate of VAT applied to building materials, despite losing a tribunal case, reported last month.
The First Tier Tribunal ruled in favour of John Price that roller blinds were building materials as defined by a section of the VAT Act 1994, and that Price was entitled to recover the cost of the purchase of blinds from HMRC.
But in a statement on its web site, HMRC said that its policy on this rule is unchanged. It said it would not appeal against the tribunal decision because a small amount of VAT was involved in the case.
“Roller blinds (and other ‘window furniture’) are not building materials as defined and [HMRC] will not be changing its policy,” HMRC said. “The tribunal chairman did not hear any evidence on the point of what is and what is not a building material for VAT purposes but reached his conclusion as a matter of judicial notice, that is, as a common sense fact.”
The construction of residential property is zero-rated for VAT purposes. However, the zero rate not only applies to the construction services but also to the building materials incorporated into the property by the person(s) supplying those construction services, according to HMRC.
HMRC says that the zero rate should apply to all goods that were incorporated into residential property by builders during its construction. The zero VAT rate has been restricted to basic materials such as bricks, mortar, timber, and glass that make up the structure of a property and to those standard fittings and fixtures such as kitchen units, work surfaces, sinks and draining boards, wash hand basins, baths and toilets that enable the property to function.
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