In Conservatory Roofing Systems Ltd v HMRC  UKFTT 506 (TC), the FTT held that the supply of an insulated conservatory roofing system was a roof conversion and therefore did not qualify for the reduced rate of VAT but was instead standard rated for VAT purposes.
The key issue for the FTT to determine was whether the work completed by Conservatory Roofing Systems Ltd (CRS) should be classified as a ‘roof replacement’ and so subject to the standard rate of 20% VAT, or an ‘installation of insulation for roofs’, within the meaning of Note 1(a) of Group 2 to Schedule 7A to VATA 1994, and therefore subject to the reduced rate of 5% VAT. The FTT dismissed CRS' appeal, concluding that CRS' supply was not of ‘installation of insulation for roofs’ and the supply could not therefore be classified as reducedrated for VAT purposes.
In coming to its decision, the FTT noted that CRS' roofing system was almost identical to the supplies made in the case of HMRC v Wetheralds Construction Ltd  UKUT 0173 (TCC), in which the UT concluded that the supplies made were standardrated for VAT purposes. The FTT commented that the supplies made by CRS extended far beyond installing insulation to a roof, noting that the work was "materially, the construction of an entirely new roofing system". Applying the test in the CJEU case of Mesto Zamberk v Finanani feciltelstvi v Hradci Kralove  STC 1703 (Case C18/12), the FTT considered that how a typical customer may view the supply was of particular importance. CRS' marketing material demonstrated that the supply was of a roofing system, to which the insulation was an incidental part. The FTT therefore agreed with HMRC that a typical consumer would, on the basis of both CRS' marketing material and the nature of the finished product, consider that they were receiving a new roofing system rather than just roofing insulation.
Why it matters: This case follows similar findings in Greenspace (UK) Ltd where the FTT found that the supply and installation of conservatory roof insulation in the form of insulated roof panels were a standardrated supply for VAT purposes.
The decision can be viewed here.