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Shop-fitting – goods or services?

9th Nov 2021
VAT Consultant
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I was looking at some pre-registration input tax. As readers will know, this is restricted to 4 years prior to registration for supplies of goods, but only 6 months for supplies of services.

So, what if goods are fitted into a building? Can goods become services?

You will often see the case of Rayner & Keeler Ltd [1994] STC 724 quoted. Unfortunately, this merely concluded that the supplies in question were complex; and comprised multiple separable supplies of goods and multiple separable supplies of services. Beyond that it did not provide any clear principles for distinguishing the two categories. In fact, the High Court referred the matter back to the Tribunal to sort it out.

A later High Court decision commented that any application of a supply which was subject to the Sale of Goods Act 1979 was an indicator that the supply in question was a supply of goods. This was in the case of Jeffs (T/A J&J Joinery) [1995] STC 759, in reference to wooden windows, doors, and other items fabricated off-site and delivered to a premises for installation by another person.

Later Tribunals, considering the two QBD cases above in light of the ECJ judgment in Card Protection Plan, have held that a single supply should not be artificially split, so a supply of fitted shelving is either a supply of goods or services, and cannot be split into one supply of goods and one supply of services.

The conclusion is usually that it is ‘a matter of impression’ in each case. And it is not sufficient simply to try to determine the cost of materials compared with the cost of the labour to fit those materials, although that might be a factor to be considered.

My own conclusion is that a supply of fitted appliances or equipment is a supply of goods.

As for ‘shop-fitting’ services, later Tribunals appear to have been inconsistent.

The Tribunal decision in Burgess & Holmes (T/A Cards N Cuddles) (VTD 14475) followed C Jeffrey Black (Opticians) Ltd (dated 1973) in deciding that the supply and fit of shop fittings was a single supply of services.

In contrast, in Miller (T/A Pulse), (VTD 18630) the supplier installed a service counter, changing booths, lighting accessories and flooring. The Tribunal, having considered the same precedent cases, concluded that the supply was actually one of goods. I have to say I am less convinced by this one!


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