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Thermo Timber Technology (“TTTâ€) supplied mobile timber frame structures and had zero-rated these goods as a supply of caravans under Group 9, Schedule 8 of VATA 1994 however this was contested by HMRC and the matter was subject to an appeal to the First-Tier Tribunal. The subject of the appeal were three structures, which were subject to planning applications, provided to a local authority school for use as a music classroom. The initial structures are purchased by TTT (this supply is charged to the standard rate of VAT) and then adapted to the clients' specific requirements before they are assembled by TTT on site. HMRC queried the zero-rating of this supply during routine checks on the businesses VAT returns and issued a final decision in writing in June 2014 ruling that the supply was in fact liable to the standard rate of VAT.  In determining the VAT liability of the supply the definition of a caravan was considered as “any structure designed or adapted for human habitation which is capable of being moved from one place to anotherâ€. Whether the structures satisfied the size and weight criteria specified in Group 9, Schedule 8 of VATA 1994 was considered, as well as whether they were manufactured to the British Standard 3262:2005, a further condition under the same legislation. When considering if the structures were designed or adapted for human habitation, the design criteria specified by the client and the planning permission obtained suggested that the intended use was not residential and therefore, the structures did not fall within the scope of zero-rating.  The appeal was therefore rejected meaning the structures supplied by TTT could not be defined as a caravan for the purposes of zero-rating the supply. If you require assistance in determining the VAT liability of a supply being made by a business you are involved in, or even require clarification that VAT has been correctly charged on a purchase that has been made, contact someone on our VAT helpline for free expert advice.

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