The Court of Appeal ruled that the appellant, Greenspace Ltd, which supplied conservatory roof insulation in the form of insulated roof panels, was not eligible for a VAT-reduced rating.

It charged VAT at the reduced rate of 5% on the basis that the supply was one of insulation for roofs and therefore ‘energy-saving materials’ under section 7A Value Added Tax Act 1994 (VATA).

However, HMRC assessed those supplies to be taxable at the standard rate of VAT and raised a VAT assessment on 17 June 2020 of £2,581,092 for the periods 12/17 to 12/19.

Greenspace made appeals against the assessments to the First Tier Tribunal (FTT) in respect of its supplies of insulated roofing panels, which were made up of a thick layer of styrofoam, manufactured by a company called Thermotec.