ICAS ICAS logo

Quicklinks

  1. About Us

    Find out about who we are and what we do here at ICAS.

  2. Find a CA

    Search our directory of individual CAs and Member organisations by name, location and professional criteria.

  3. CA Magazine

    View the latest issues of the dedicated magazine for ICAS Chartered Accountants.

  4. Contact Us

    Get in touch with ICAS by phone, email or post, with dedicated contacts for Members, Students and firms.

Login
  • Annual renewal
  • About us
  • Contact us
  • Find a CA
  1. About us
    1. Governance
  2. Members
    1. Become a member
    2. Newly qualified
    3. Manage my membership
    4. Benefits of membership
    5. Careers support
    6. Mentoring
    7. CA Wellbeing
    8. More for Members
    9. Area networks
    10. International communities
    11. Get involved
    12. Top Young CAs
    13. Career breaks
    14. ICAS podcast
    15. Newly admitted members 2022
    16. Newly admitted members 2023
  3. CA Students
    1. Student information
    2. Student resources
    3. Learning requirements
    4. Learning updates
    5. Learning blog
    6. Totum Pro | Student discount card
    7. CA Student wellbeing
  4. Become a CA
    1. How to become a CA
    2. Routes to becoming a CA
    3. CA Stories
    4. Find a training agreement
    5. Why become a CA
    6. Qualification information
    7. University exemptions
  5. Employers
    1. Become an Authorised Training Office
    2. Resources for Authorised Training Offices
    3. Professional entry
    4. Apprenticeships
  6. Find a CA
  7. ICAS events
    1. CA Summit
  8. CA magazine
  9. Insight
    1. Finance + Trust
    2. Finance + Technology
    3. Finance + EDI
    4. Finance + Mental Fitness
    5. Finance + Leadership
    6. Finance + Sustainability
  10. Professional resources
    1. Anti-money laundering
    2. Audit and assurance
    3. Brexit
    4. Business and governance
    5. Charities
    6. Coronavirus
    7. Corporate and financial reporting
    8. Cyber security
    9. Ethics
    10. Insolvency
    11. ICAS Research
    12. Pensions
    13. Practice
    14. Public sector
    15. Sustainability
    16. Tax
  11. CPD - professional development
    1. CPD courses and qualifications
    2. CPD news and updates
    3. CPD support and advice
  12. Regulation
    1. Complaints and sanctions
    2. Regulatory authorisations
    3. Guidance and help sheets
    4. Regulatory monitoring
  13. CA jobs
    1. CA jobs partner: Rutherford Cross
    2. Resources for your job search
    3. Advertise with CA jobs
    4. Hays | A Trusted ICAS CA Jobs Partner
    5. Azets | What's your ambition?
  14. Work at ICAS
    1. Business centres
    2. Meet our team
    3. Benefits
    4. Vacancies
    5. Imagine your career at ICAS
  15. Contact us
    1. Technical and regulation queries
    2. ICAS logo request

The VAT liability of insulated roofing panels

  • LinkedIn (opens new window)
  • Twitter (opens new window)
By Jan Garioch CA

19 October 2020

Key points:

  • This case involves a battle over the supply of opaque, insulated roofing panels to replace the existing panels in customers’ conservatories.
  • HMRC argue that the form of the supply does not qualify it as ‘insulation for roofs’ which it would need to be to secure the reduced rate.
  • Greenspace argued it would be perverse to deny the reduced rate as the substance of their supply was more than 90% insulation

Jan Garioch CA discusses a recent case Greenspace (UK) Ltd v HMRC where an argument over entitlement to apply reduced rate VAT to insulated roofing panels leaves £2.5million of VAT at stake.

The First Tier Tribunal has given its judgement on Greenspace (UK) Ltd v HMRC. The point at issue was whether or not Greenspace was correct to argue that its supplies of roofing panels are supplies of insulation for roofs which should be treated as the supply of “energy-saving materials” under Note 1(a) Grp 2 of Sch 7A VATA 1994. If not, £2.5million of underpaid output VAT was payable.

The judge’s in-tray prior to the hearing must have been something to behold as it contained a Greenspace roofing panel, a cross-section of a panel and a Pinevale roofing panel which had been the subject of a relevant case. Her pre-hearing homework of watching “YouTube” advertising and installation videos was unusual too.

Examination of the witnesses differed from the norm as well. The witness statement from the HMRC officer was not disputed; hence his statements were accepted and he was not cross-examined. However, the witness for Greenspace not only provided his witness statement but gave oral evidence on screen to the Tribunal and was cross-examined.

HMRC’s case

HMRC’s argument was that insulation has a specific function that is separate and distinct from materials which can also serve another purpose. Greenspace procured Styrofoam insulation panels which were cut to size and weatherproofed. Old panels were removed and new insulated panels were slotted into the existing framework of their customer’s roof.

The wording of the relief does not apply to insulated roofing panels and HMRC argued they were not being overly restrictive in their approach to the legislation. In HMRC’s view, a conservatory which had only struts and glazing bars could not be described as having a roof. HMRC cited Revenue and Customs Commissioners v Pinevale Ltd where it was established that insulation for roofs does not include the supply of a roof itself with insulating properties.

Greenspace’s counterargument

Greenspace counterargued that HMRC were indeed being restrictive by excluding Greenspace’s panels from the relief merely because they included 2mm of weatherproofing material. If the Styrofoam insulation had been supplied and applied to the customers’ existing roof panels, it would be treated as energy-saving material. It would be perverse to lose the VAT treatment for the supply of an energy-saving material because their supply entails the removal of existing panels and replacing them with insulation plus a thin aluminium weatherproofing coating. Greenspace sought to distinguish Pinevale saying that case did not make it a principle of law that supply of roof panels must be treated as installation of a roof and not insulation for a roof.

The relevant legislation and the decision

The Tribunal focused on Grp2 Sch 7A VATA 1994 and its note;

“Supplies of services of installing energy-saving materials in residential accommodation.
Supplies of energy-saving materials by a person who installs those materials in residential accommodation.”

“For the purposes of this group “energy-saving materials” means any of the following – insulation for walls, floors, ceilings, roofs or lofts or for water tanks, pipes or other plumbing fittings.”

It was clear to the Judge that the legislation was distinguishing between something which is for a roof and something which is a roof. It was also clear to the Judge that the function of the roof panels provided by Greenspace is not confined to insulation because they form part of the conservatory roofs themselves; without the roof panels, there would be no roof. Greenspace is in error of the law to argue about the substance of their supply. The fact that more than 90% of what they supply is insulation does not alter the form-based nature of the exemption.

Greenspace’s appeal was rejected, with the trenchant remark that “the answer to any perversity in a case like this is to argue for a change in the legislation to include the type of insulated conservatory roof panels which have been supplied by Greenspace, rather than use perversity as the basis for interpreting legislation to override its clear wording”.

VAT in a post Brexit environment

By Charlotte Barbour CA CTA (Fellow), Director of Taxation, ICAS

8 September 2020

The Upper Tribunal supported HMRC’s argument that the burden of proof regarding best judgement assessments did not switch from the appellant to them

By Jan Garioch CA

31 July 2020

2-23-marsh 2-23-marsh
ICAS logo

Footer links

  • Contact us
  • Terms and conditions
  • Modern slavery statement
  • Privacy notice
  • CA magazine

Connect with ICAS

  • Facebook (opens new window) Facebook Icon
  • Twitter (opens new window) Twitter Icon
  • LinkedIn (opens new window) LinkedIn Icon
  • Instagram (opens new window) Instagram Icon

ICAS is a member of the following bodies

  • Consultative Committee of Accountancy Bodies (opens new window) Consultative Committee of Accountancy Bodies logo
  • Chartered Accountants Worldwide (opens new window) Chartered Accountants Worldwide logo
  • Global Accounting Alliance (opens new window) Global Accounting Alliance
  • International Federation of Accountants (opens new window) IFAC
  • Access Accountancy (opens new window) Access Acountancy

Charities

  • ICAS Foundation (opens new window) ICAS Foundation
  • SCABA (opens new window) scaba

Accreditations

  • ISO 9001 - RGB (opens new window)
© ICAS 2022

The mark and designation “CA” is a registered trade mark of The Institute of Chartered Accountants of Scotland (ICAS), and is available for use in the UK and EU only to members of ICAS. If you are not a member of ICAS, you should not use the “CA” mark and designation in the UK or EU in relation to accountancy, tax or insolvency services. The mark and designation “Chartered Accountant” is a registered trade mark of ICAS, the Institute of Chartered Accountants of England and Wales and Chartered Accountants Ireland. If you are not a member of one of these organisations, you should not use the “Chartered Accountant” mark and designation in the UK or EU in relation to these services. Further restrictions on the use of these marks also apply where you are a member.

ICAS logo

Our cookie policy

ICAS.com uses cookies which are essential for our website to work. We would also like to use analytical cookies to help us improve our website and your user experience. Any data collected is anonymised. Please have a look at the further information in our cookie policy and confirm if you are happy for us to use analytical cookies: