David Cosham claimed a total of £14,505 in VAT refunds under the DIY housebuilders scheme in March 2017. HMRC accepted some elements of this claim but rejected the element which related to VAT on the electric blinds installed at his property, amounting to £2,303. [David Cosham and the Commissioners for Her Majesty’s Revenue and Customs, [2019] UKFTT 0119 TC06985].

The electric blinds were installed in the rooms in the property which were south facing, being the shared rooms in the house and were programmed to regulate the temperature in those rooms. Cosham, who appeared in person at the tribunal, argued that the blinds fell into the categories outlined in Note 22 of the DIY housebuilders scheme, VATA 1994, Sch 8, Grp 5. Note 22 defined building materials as goods of a description ordinarily incorporated by builders in a building of that description, (or its site), excluding among others electrical appliances.

He said his property was described for planning purposes as a ‘sustainable home’ and that reflects what is now a well-established market, and that such properties commonly had blinds of the sort he had installed. Cosham also argued that the comparator should not be with the lowest common denominator of generic homes.

He said the blinds were not electrical appliances, and therefore excluded, because their function was to control the temperature of a room.

While Cosham claimed it was now standard practice in eco1 buildings to incorporate electric blinds as a means of temperature control, he failed to produce evidence of this before the FTT. He also pointed out that roller blinds had been accepted as building materials in a tribunal hearing and that blinds could be treated as building materials when installed by charitable bodies.

For its part, HMRC argued that the correct comparator building was a four bedroomed house. Electric blinds were not ordinarily installed in such buildings and therefore fell outside the definition of building materials in Note 22. HMRC also considered that electric blinds were electrical appliances and therefore excluded. Cosham referred to another case which had reached tribunal (Price [2011] TC 00873), but this had involved roller blinds and HMRC had disagreed with that decision by way of issuing a public notice, 02/2011.

The FTT took as its lead authority an Upper Tribunal case involving Taylor Wimpey, which suggested that the comparison test required was to consider the use rather than the quality of a building. The FTT viewed HMRC’s comparator test as too general and that eco buildings can be considered as a distinct type of building.

The judge stated: ‘However, in order to win this appeal Mr Cosham also needs to demonstrate that electric blinds of the type under consideration here are ordinarily incorporated into buildings of this type.

‘Mr Cosham asserted at the tribunal that this was the case, but despite being given additional time to demonstrate this by means of evidence, did not produce any evidence to the tribunal to support this contention.

‘On the basis of the evidence provided to the tribunal, the tribunal cannot accept that electric blinds are ordinarily installed in eco-build houses and Mr Cosham’s appeal on this point must fail.’

As a result, there was therefore no need to address the issue of whether the electric blinds were electrical appliances.

James Johnson, tax writer for Croner-i, said: ‘DIY cases are few and far between but this case has some interest in that it highlights how the FTT approached the question of what are building materials which is relevant in the construction industry.

‘The FTT took a view that an eco-build home was a distinct type of building but ultimately the appellant could not produce evidence that showed electric blinds were ordinarily incorporated into that type of building so the appeal failed.’

David Cosham and the Commissioners for Her Majesty’s Revenue and Customs, [2019] UKFTT 0119 TC06985 is here.

Report by Pat Sweet