In Greenspace Limited v HMRC [2021] UKUT 0290, the Upper Tribunal confirmed that insulated roof panels were roofing products and not insulation. Unlike insulation that could be separately attached to a roof, the panels formed the roof. The supply of panels did not qualify for a reduced rate of VAT.

Greenspace's main business in the UK is the supply of conservatory roof insulation in the form of insulated roof panels. Roof glass would be removed and the panels would be inserted to provide an insulated roof.

HMRC assessed Greenspace's VAT at £2,581,092 on the basis that its supplies were of roofing panels that were standard-rated services.

Greenspace argued against the assessments on the basis that:

  • The services should be charged at the reduced rate of 5% as its predominant purpose of the supply of roofing panels was the supply of insulation for roofs
  • This should be treated as the supply of 'Energy-Saving Materials' under Note 1(a) Group 2 of Schedule 7A Value Added Tax Act 1994 (VATA 1994).

The company had made an appeal to the UT following its unsuccessful Appeal to the First Tier Tribunal.

The UT considered four grounds for appeal:

 (1) The FTT wrongly rejected Greenspace’s submission that the question of whether any given supply is of either insulation for a roof or of the roof itself, is a question of fact and degree (not law) and that it depends upon the nature and extent of the supply. In particular, the FTT was wrong to reject Greenspace’s argument that there was a 'sliding scale' relevant to the question of whether it was supplying a new roof or insulation for a roof.

The UT found that the FTT was entitled, as it did, to focus on what Greenspace actually provided, namely panels. It was entitled to consider the panels and their installation and ask itself whether the overall supply of panels involved Greenspace in supplying a roof or insulation for a roof. It dismissed Greenspace’s appeal on ground one.

(2) The FTT wrongly predicated its decision on the state of a conservatory mid-way through the installation process.

The UT found that FTT had before it all the evidence. It had seen videos of the installation process. Its conclusion that the structure in question was not a roof formed part of its overall evaluation and involved no error of law. It dismissed Greenspace’s appeal on ground two.

(3) The FTT wrongly approached matters on the basis that, because the panels consisted, in part, of a roof covering, Greenspace was necessarily supplying a roof rather than 'insulation for … roofs'.

The UT agreed with Greenspace that neither the of previous decisions which had looked at similar issues established any rule of law to the effect that something which is or forms 'part of' a roof is incapable of being insulation for a roof because it also performs that function.

  • The FTT was doing no more than restating the proposition to be derived from HMRC v Pinevale [2014] UKUT 204 that if the panels together formed a roof rather than insulation 'for' a roof, they could not fall within the scope of the reduced rate.
  • The FTT considered what the position would have been if Greenspace had simply stuck Styrofoam blocks to customers’ existing glass or polycarbonate panels, without removing those panels, and concluded that, in that case, it might well have been supplying insulation for roofs, rather than a roof itself.

In most cases, when fitted, the panels would comprise the entirety of the roof covering for the conservatory in question. No unwarranted assumption is indicated by the FTT’s conclusion that the panels so fitted constituted a 'roof'. It dismissed Greenspace’s appeal on ground three.

 (4) In addition to the above errors of approach, the FTT also made various discrete errors of law throughout its decision.

The UT dealt with those and dismissed the appeal.


HMRC's case in Pinevale was remarkably similar: that the panels are not 'insulation for roofs' but are the roof itself. Thus, if an entire existing roof is replaced, the panels constitute the new roof, not just insulation for a roof. Likewise, the replacement of individual panels with Pinevale’s panels was the supply of new roof panels, not the supply of insulation for a roof.

Useful guides on this topic

Energy Savings Materials
The supply of and fit of energy savings materials in residential accommodation attracts a reduced rate of VAT. What does it apply to? What are the qualifying conditions? 

Input VAT claims: Pre-registration
When can pre-registration input VAT be recovered? What are the time limits and restrictions? 

CIS: Construction Industry VAT reverse charge
The Construction Industry Scheme (CIS) VAT Domestic Reverse Charge (DRC) applies to supplies of construction services from 1 March 2021

External Link

Greenspace Limited v HMRC [2021] UKUT 0290 

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