Revenue & Customs Brief 5 (2021): 'VAT liability of installation of blinds – First Tier Tribunal decision' explains HMRC's revised policy on the VAT treatment of installation of blinds.

Background

  • The construction of a Dwelling is zero-rated for VAT purposes. This applies to construction services and building materials provided by the persons supplying the construction services.  
  • Building materials are defined as: 'goods of a description ordinarily incorporated by builders in a building of that description (or its site)'. 
    • This includes bricks, timber, kitchen units, sinks, washbasins, baths and toilets.  
    • The definition of building materials is also significant for DIY housebuilders, who are able to reclaim VAT charged on building materials (typically charged because there is no associated qualifying service).
  • HMRC's stated policy was that roller blinds and other ‘window furniture’ were not building materials.
    • Roller blinds could not be zero-rated nor could VAT be recovered under the DIY housebuilders' scheme. 

Revised policy

  • HMRC's position was challenged in Wickford Development Co Ltd (Wickford) v HMRC [2020] TC07864where the First Tier Tribunal (FTT) found that manual window blinds are building materials that did not fall into any of the exceptions. As such, they could qualify for zero-rating. 
  • From 5 October 2020, HMRC have accepted the FTT decision that manual window blinds and shutters are building materials for VAT purposes.
    • This does not extend to motorised blinds, which are included in the exceptions of the blocking order as electrical appliances.
  • Where VAT has previously been disallowed based on HMRC's former policy, a Correction can be made on the VAT return, subject to the four-year cap and Unjust enrichment rules. 

Useful guides on this topic

Land & Property: Dwellings
What is a dwelling for VAT purposes? What is the VAT treatment for construction, conversion, sale, and letting of a dwelling? 

Land & Property VAT (Subscriber guide)
An outline of the VAT treatment of some of the more common supplies of land and property.

Land & Property: DIY Housebuilders scheme
It is possible to recover VAT on constructing a new residential dwelling, or dwellings, even where there is no planned sale of the property. This recovery can arise under the special refund scheme for DIY housebuilders.

New build blinds: building materials for VAT
In Wickford Development Co Ltd (Wickford) v HMRC [2020] TC07864, the First Tier Tribunal (FTT) found that VAT charged on roller blinds incorporated in the buildings was eligible for recovery as ‘building materials’. 

External link

Revenue and Customs Brief 5 (2021): VAT liability of installation of blinds – First Tier Tribunal decision


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