Envoygate (Installations); Richvale (TC3361)
Two associated companies supplied and fitted bespoke sash windows in residential properties. They also provided draught stripping for windows.
The firms charged VAT at 20% on the windows but levied the reduced rate of 5% on the stripping regardless of whether the customer bought both types of products or just the stripping.
HMRC agreed 5% was correct when customers bought only the stripping but supply was subject to the standard rate when both products were purchased.
The taxpayer appealed.
The First-tier Tribunal noted that when customers bought windows and stripping the cost of the latter item was about 50% of that of the former. Ten per cent of the companies’ business comprised supplies of draught stripping only.
The tribunal looked at previous decisions – including Card Protection Plan v CCE (Case C-349/96) [1999] STC 270 – on whether a transaction comprises a single or two or more...
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