Conservatory roof systems – The tribunal decides that the supply of an insulated conservatory roof system by a company does not grant a reduced VAT rate


In Conservatory Roofing Systems Ltd v HMRC [2020] UKFTT 506 (TC) took the view of the financial transaction tax that the supply of an insulated conservatory roof system represents a roof conversion and is therefore not eligible for the reduced VAT rate, but is valued by default for VAT purposes.

It was critical for financial transaction tax to determine whether the work being carried out by Conservatory Roofing Systems Ltd (CRS) should be classified as “roof replacement” and therefore subject to the standard rate of 20% VAT or “installation of roof insulation” in Meaning of note 1 letter a of group 2 to appendix 7A to VATA 1994 and is therefore subject to the reduced rate of 5% VAT. The FTT dismissed CRS ‘appeal and concluded that CRS’ delivery was not an “installation of roof insulation” and therefore could not be classified as discounted for VAT purposes.

In making its decision, the FTT found that the CRS roof system was almost identical to the supplies in the case of HMRC v Wetheralds Construction Ltd [2018] UKUT 0173 (TCC) in which the UT concluded that the supplies made were standardized for VAT purposes. The Financial Transaction Tax noted that supplies made by CRS went well beyond installing insulation on a roof, stating that the work was “essentially the construction of an entirely new roofing system”. Application of the test in the ECJ case of Mesto Zamberk v Finanani feciltelstvi v Hradci Kralove [2014] In STC 1703 (Case C18 / 12), the financial transaction tax considered that it was of particular importance how a typical customer would assess the delivery. The CRS marketing material indicated that the delivery was a roofing system that included the insulation. The Financial Transaction Tax therefore agreed with HMRC that based on CRS’s marketing material and the nature of the finished product, a typical consumer would assume they would receive a new roof system, rather than just roof insulation.

Why it matters: This case follows similar findings in Greenspace (UK) Ltd where the Financial Transaction Tax found that the supply and installation of conservatory roof insulation in the form of insulated roof panels was a standard supply for VAT purposes.

The decision can be viewed here.

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