Published on May 21, 2014
Indirect Tax Update for week ending 16 May 2014 The Upper Tribunal has issued two judgments this week. The first was in HMRC's appeal relating to whether replacement roof panels for conservatories can be classed as insulating materials and thus benefit from VAT at the reduced rate. The second relates to whether a particular dog food supplied by the taxpayer was pet food. Only in the world of Indirect Tax could one have such a lengthy and detailed debate about whether or not a particular dog food constituted a pet food and whether, as a consequence, the food qualified for zero-rating as animal feeding stuffs. In the case of HMRC v Roger Skinner Ltd, the Upper Tribunal has issued its judgment and has dismissed HMRC's appeal from the First-tier Tribunal which found that the dog foods in question were largely zero-rated. UK VAT law provides for the VAT zero-rate to apply to supplies of animal feeding stuffs except for supplies of pet foods and biscuits and meal for cats and dogs. In 1994 HMRC accepted that food specially formulated and held out for sale for 'working' dogs could continue to be treated as animal feeding stuffs and be zero-rated. In this case, HMRC argued that the composition of the food and the way it was packaged and held out for sale meant that it should not be zero-rated. However, the Upper Tribunal concluded that, on the facts, the First-tier Tribunal was right to reach the conclusions that it did. None of the products in dispute was "meal" for dogs. HMRC's appeal was dismissed. Comment – Having lost in two Tribunals, HMRC is unlikely to appeal this judgment. Any such appeal must be viewed as 'barking' up the wrong tree but they have been a bit like 'a dog with a bone' with this one! By contrast, the Upper Tribunal has allowed HMRC's appeal in a case relating to the supply of polycarbonate roof panels for conservatories. The First-tier Tribunal had ruled against HMRC when it found that the panels in question qualified for the reduced rate of VAT. In HMRC v Pinevale Ltd the Upper Tribunal has overturned the decision of the First-tier Tribunal. The Upper Tribunal considers that the First-tier Tribunal made an error interpreting the relevant VAT law. Agreeing with HMRC's analysis, the Upper Tribunal held that 'a material which is insulation for a roof is not the same thing as the roof itself. It presupposes that there is a roof to which the insulating material is applied'. Comment – This seems to be a sensible and logical judgment. The taxpayer in this case was not represented as it had gone into creditor's voluntary winding up so no further appeal on the issue is likely. The judgment does, however, set a binding precedent. For further information in relation to any of the issues highlighted in this Indirect Tax Update please contact: London/South East Karen Robb email@example.com The Regions Stuart Brodie firstname.lastname@example.org The Midlands Mike Sheppard email@example.com © 2014 Grant Thornton UK LLP All rights reserved ‘Grant Thornton’ means Grant Thornton UK LLP, a limited liability partnership Grant Thornton UK LLP is a member firm of Grant Thornton International Ltd (GTIL). GTIL and the member firms are not a worldwide partnership. Services are delivered by the member firms. GTIL and its member firms are not agents of, and do not obligate, one another and are not liable for one another's acts or omissions. This publication has been prepared only as a guide. No responsibility can be accepted by us for loss occasioned to any person acting or refraining from acting as a result of any material in this publication. www.grant-thornton.co.uk Indirect Tax Update 20/2014
Itu202014; Itu202014 Nov 28, 2014 Documents graham-brearley. of 1
Indirect Tax Update for week ending 16 May 2014 The Upper Tribunal has issued two judgments this week. The first was in HMRC's appeal relating to whether ...