Draught proofing

The taxpayer charged 5% VAT on supply and installation of draught stripping to residential properties (as energy-saving materials under VATA1994 Sch 7A Group 2 Items 1 and 2) and charged the same rate on repair work carried out on sash windows at the same time.

HMRC considered the situation to be a single standard-rated supply of making good the windows with the draught stripping incidental.

The First-tier Tribunal ruled in favour of the taxpayer in part: there was a mixed supply where the taxpayer had made separate charges for the repair work and the draught stripping.

There was a need to “look for the essential purpose (objectively assessed) of a transaction” and “the importance of viewing the matter from the (typical) customer’s viewpoint” the tribunal said.

Independent VAT consultant Neil Warren said the ruling was consistent with the recent Envoygate (Installations) Ltd (TC3361)...