Steven James Mort v The Commissioners for HMRC
Decision date: 24 April 2023
Neutral citation: [2023] UKFTT 387 (TC)
Overall AI summary confidence: high
Short overview
This short overview is intended to summarise the case, issues and outcome so far as they are supported by the judgment.
AI confidence in this short overview: high
This appeal concerned Mr Mort's claim for VAT repayment under the DIY housebuilders' refund scheme, with HMRC disputing whether numerous supplies were zero-rated construction services or standard-rated supplies of goods (and whether certain items were "building materials" or excluded as furniture). The Tribunal applied the predominant-element test to each invoiced supply, finding some supplies to be predominantly services (zero-rated) and others predominantly goods (standard-rated), and held fitted bedroom furniture to be furniture not building materials. The appeal was allowed in part, with Mr Mort recovering an additional £16,683.81.
Ratio decidendi
This summary is intended to identify the ratio decidendi, meaning the legal reasons for deciding and the binding part of the decision.
AI confidence in this ratio decidendi summary: high
Where a transaction involves both goods and installation, the Tribunal applies an objective predominant-element test from the perspective of a typical customer, weighing qualitative and quantitative importance to decide whether there is a single supply of services (zero-rated under Item 2) or separate supplies of goods (standard-rated). Item 4's zero-rating for materials applies only where goods are supplied together with services that include incorporation into the building; freestanding supplies of goods without incorporation remain standard-rated.
Obiter dicta
This summary is intended to identify obiter dicta, meaning observations made by the way that were not necessary to deciding the case and are not binding.
AI confidence in this obiter dicta summary: medium
The Tribunal criticised HMRC's procedural stance of defending retention of VAT rather than facilitating repayment to suppliers as commercially and administratively unsatisfactory, while noting the Tribunal lacks judicial review powers to compel a different administrative approach. The Tribunal also remarked that a supplier's choice to treat a supply as standard-rated is of little weight; classification is an objective question for the Tribunal.