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HMRC internal manual

VAT Construction

Building materials - Note 22 and Note 23: what ‘incorporated’ means

The term ‘incorporated’ is not defined in the legislation. Our view on the meaning of ‘incorporated’ can be found in Notice 708 Buildings and construction.

It doesn’t include free standing goods, for example loose items of furniture.

It does include items that are merely fixed.

This view is supported in the case of McLean Homes Midland Limited ([1993] STC 335) where the High Court analysed how the then ‘Blocking Order’ worked; the same analysis applies to the definition in the context of ‘kitchen furniture’ and the definition of ‘pre-fabricated/finished’. The High Court stated:

This seems to us to indicate that the draftsman contemplated that finished or prefabricated furniture would become incorporated into the building when it was fitted into the building. If that is right ‘fitted furniture’ would seem to refer to furniture that was incorporated into the building by the process of fitting. It is difficult to see how a piece of furniture can be incorporated into a building except by being in some way fixed to, or possibly enclosed in the fabric of, it.