Was fuel and plant hire a single or multiple supply?

The company is one of the UK’s largest suppliers of plant and tool hire with 175 depots. Typical supplies could be for the hire of diggers or dumpers and hire periods vary between one day and five years. For major account customers the use of the plant is mainly relevant to their supplies in the construction and utility industries.

As well as plant hire GAP also provides other services such as delivery charges and red diesel fuel. With the fuel supplies 5% VAT is usually charged because of the de minimis quantities specified in VATA 1994 Sch 7A Group 1 Item 1 Note 5(c).

HMRC’s view was that the taxpayer was wrong to itemise the fuel and plant hire supplies on its sales invoices separately and that there was a single supply of plant with fuel all subject to 20% VAT. It issued...