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HMRC internal manual

VAT Construction

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Building materials - Note 22 and Note 23: ‘ordinarily incorporated’ test: what ‘of a description ordinarily incorporated by builders’ means

The term ‘of a description ordinarily incorporated by builders’ is not defined in the legislation.

The judgment in Smitmit Design Centre Limited ([1982] STC 525), however, confirms that the test is not whether somebody in trade as a builder ordinarily incorporates the goods in a building. Instead the test is whether the article is one that is ordinarily incorporated in a building without any special instruction during the course of its construction.

This is supported by the Purchase Tax case decision in F Austin (Leyton) Limited ([1968] 2 All ER 13), where the court stated:

The word ‘ordinarily’ when read in conjunction with the opening words ‘builders’ hardware, sanitary ware and other articles of a kind’ and the concluding words ‘as fixtures’ indicate, in my judgment, that what is meant by the words ‘ordinarily installed by builders’ is that they are ordinarily installed in the course of building - articles which one would expect a builder to install as fixtures in the ordinary way without any special instruction.

The decision also confirms that ‘ordinarily’ doesn’t mean ‘invariably’:

‘Ordinarily’ means in the ordinary way: other synonyms would be ‘commonly’ or perhaps ‘usually’.

In the Tribunal decision in Sharps/Smitmit ([1982] STC 525), Mr Justice Glidewell said in relation to the above judgment:

The proper questions to be asked in relation to this matter are, therefore, in my judgment: Are articles of fixed furniture ordinarily installed as fixtures? It will be noted that the question is not restricted to bedroom furniture, kitchen furniture, or any particular kind of furniture. If the answer to that question is ‘Yes’, then the second proper question is: Are wardrobes as those supplied by this company amongst the categories of fitted furniture which are so installed?

However, to allow for changes in technology and consumer preference, the test explained above is applied to the generic description of the article in issue.

For example, in the case of F Booker (Builders and Contractors) Limited (VTD 446), the Tribunal recognised there are a number of different heating systems that can be employed in a building. It went on to say that it is absurd to have to await the adoption of a single method of heating before that type meets the test of ‘ordinarily incorporated’. All types of heating systems are, therefore, accepted as being ‘ordinarily incorporated’ in dwellings by builders. Hot and cold water supplies are ‘ordinarily incorporated’ in buildings by builders. The use of lead pipes or gold taps does not affect this position.

Lighting systems are accepted as being ‘ordinarily incorporated in dwellings by builders but see VCONST13730 for the treatment of intelligent lighting systems.