Building materials or not

The taxpayer sold static caravans supplied with fixtures and fittings. An issue arose as to which should be zero rated for VAT under VATA 1994 Sch 8 group 9 and which should be subject to the standard rate.

The First-tier Tribunal set out a two-fold test: the effect on the caravan if an item were to be removed and how easily an item could be removed.

The tribunal then divided a list of disputed items into three groups. The first consisted of those that were clearly removable and not building materials such as blinds the washing machine and sofas.

The second collection was removable items: wall mirrors storage units and suchlike. The final group consisted of fittings that would damage the structure of the caravan if removed. They included wiring and glued-down carpets.

HMRC claimed the tribunal erred in its interpretation of “removable contents”...