Timing of modification

The taxpayer charity gave disabled people the opportunity to take part in aviation. It bought two light aircraft in 2008 and intended to adapt one immediately for use by its beneficiaries. The second plane had already been modified.

HMRC claimed VAT was due on the supplies of the aircraft. The taxpayer appealed saying the supplies should be zero rated under VATA 1994 Sch 8 Group 12 item 2(g) on the basis the aircraft were designed solely for the use of disabled aviators and had been supplied to a charity that provided care for such individuals.

The First-tier Tribunal allowed the taxpayer’s appeal.

The Revenue took the case to the Upper Tribunal which said the question as to whether or not an item had the physical characteristics to qualify as designed purely for a disabled person’s use had to be decided according to the appearance of the...