Policy paper

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

Published 11 May 2021

Purpose of this brief

This brief explains HMRC’s policy concerning the VAT treatment of installation of blinds following the First-tier Tribunal’s (FTT) decision in Wickford Development Co Ltd (Wickford) (Decision No TC2017/08197 and TC2018/03555).

In particular, it explains that HMRC accepts that manual blinds are considered as building materials for the purposes of construction services.

Who should read this

Organisations in the construction industry and their advisers.

VAT liability background

The construction of a residential property is zero-rated for VAT purposes. The zero rate applies to the construction services and to the ‘building materials’ incorporated into the property by the persons supplying those construction services.

The zero rate is restricted to those basic materials that make up the structure of a property, for example:

• bricks
• mortar
• timber
• glass

Standard fittings and fixtures that enable the property to function are also covered. Examples are:

• kitchen units
• work surfaces
• sinks and draining boards
• wash hand basins
• baths
• toilets

Definition of building materials for the purposes of VAT

Note 22, Group 5, Schedule 8 of the VAT Act 1994, provides the details of what items are covered by the Input Tax blocking order under paragraph 6 SI1992/3222. The law defines ‘building materials’, in relation to the construction of a building, as ‘goods of a description ordinarily incorporated by builders in a building of that description (or its site)’. Some goods are specifically excluded from the definition, for example, fitted furniture, electrical and gas appliances but with some exceptions. Kitchen furniture and boilers are examples of these exceptions.

Claim VAT through a refund scheme if you are a DIY house builder

You are unable to benefit from the zero rate provided for ‘building materials’ if you both:

• buy building materials
• use your own (or other) labour to incorporate those materials into your properties

However, you can claim the VAT charged on those materials through a refund scheme. You can only recover the VAT amounts for the basic materials and standard fixtures and fittings.

The First-tier Tribunal’s decision and HMRC’s revised policy

In Customs Brief 02/11, HMRC stated that roller blinds (and other ‘window furniture’) are not ‘building materials’, meaning that the VAT was blocked and could not be recovered.

The FTT concluded that manual window blinds are goods of a description ordinarily incorporated by builders into properties as single family dwellings. They also ruled that they do not fall into any of the exceptions contained in the blocking order.

HMRC has accepted the FTT’s decision that manual window blinds and shutters are considered building materials for VAT purposes. They can now be zero-rated when installed in a qualifying build.

This does not extend to any window blinds that are motorised. These are included in the exceptions of the blocking order as electrical appliances. HMRC’s policy on curtains has not changed as they are not fixtures incorporated into a building.

Date of policy change

This decision takes effect from 5 October 2020.

Adjustments where VAT was disallowed

In cases where VAT was disallowed, an adjustment can be made on the VAT return.

For information on how to make adjustments, the 4-year cap and rules relating to unjust enrichment see How to correct VAT errors and make adjustments or claims (VAT Notice 700/45).