VAT – supply of conservatories – whether zero-rated under VATA 1994 Sch 8 Group 5 as being “in the course of construction” of houses or excepted by Note 16 as alteration or enlargement of existing buildings – contract entered into before building complete – whether tax point rules affect character of supply – no – appeal dismissed

LONDON TRIBUNAL CENTRE

	J M ASSOCIATES	Appellant

	- and -

	THE COMMISSIONERS OF CUSTOMS AND EXCISE	Respondents

			Tribunal:	JOHN CLARK (Chairman)
					SHEILA WONG CHONG FRICS

Sitting in public in London on 15 April 2004

Mr P Dancy, Director, for the Appellant

Ms Zoë Taylor of Counsel, instructed by the Solicitor’s Office of HM Customs and Excise, for the Respondents

© CROWN COPYRIGHT 2004

DECISION

1.	The Appellant appeals against a decision on review upholding a decision that the supply of conservatories constructed on new dwellings is liable to VAT at the standard rate, and upholding the officer’s assessment. The issue in this appeal is whether the supply of conservatories on the basis of the contractual arrangements entered into by the Appellant is zero-rated, or is excepted from zero-rating as an alteration or enlargement to an existing building.
The legislation

2.	Item 2(a) of Group 5 of Schedule 8 to the Value Added Tax Act 1994 zero-rates—
“The supply in the course of the construction of— 

		(a)	   a building designed as a dwelling or number of dwellings or intended for use solely for a relevant residential purpose or a relevant charitable purpose; or 

		(b)	   any civil engineering work necessary for the development of a permanent park for residential caravans, 
	
of any services related to the construction other than the services of an architect, surveyor or any person acting as a consultant or in a supervisory capacity.”
Item 4 of Group 5 of that Schedule zero-rates—
“The supply of building materials to a person to whom the supplier is supplying services within item 2 or 3 of this Group which include the incorporation of the materials into the building (or its site) in question.”
Under Note 16 to Group 5 of Schedule 8, there is an exclusion from zero-rating:
“(16) For the purpose of this Group, the construction of a building does not include— 
		(a)	   the conversion, reconstruction or alteration of an existing building; or 

		(b)	   any enlargement of, or extension to, an existing building except to the extent the enlargement or extension creates an additional dwelling or dwellings; or 

		(c)	   subject to Note (17) below, the construction of an annexe to an existing building.”
	
Under regulation 93(1) of the VAT Regulations 1995 (SI 1995/2518):
“(1) Where services or services together with goods, are supplied in the course of construction, alteration, demolition, repair or maintenance of a building . . . under a contract which provides for such supplies to be made periodically or from time to time, those services or goods and services shall be treated as separately and successively supplied at the earliest of the following times—
(a)            each time that a payment is received by the supplier,

 (b)           each time the supplier issues a VAT invoice . . .”

The facts

3.	The Commissioners supplied a bundle of documents, including a witness statement from the officer, Georgia Bottomley. Mr Dancy gave oral evidence on behalf of the Appellant, and Miss Bottomley gave evidence for the Commissioners. A copy of her notes, referred to in her witness statement, was supplied separately; she confirmed that these were the notes referred to in her statement. From the evidence we find the following facts.
4.	The Appellant is a partnership that supplies and constructs conservatories. It also carries out other general building works. Its VAT registration was effective from 1 December 1998. It contacts purchasers of houses that are in the process of being built, and enters into contracts with them to supply and construct conservatories at the new houses. The developers do not offer the conservatories as optional extras to the purchasers, and the developers are not a party to the contract for the supply of the conservatory to the purchaser. The initial contact between the Appellant and the purchaser usually takes place after the purchaser has exchanged contracts with the developer for the purchase of the property; occasionally the contact is earlier, but no firm contract for the conservatory is entered into until after exchange of contracts for the purchase. Before the building of the house is completed, the Appellant and the purchaser agree the specifications for the conservatory, a “works programme”, and a schedule of payments, the normal initial deposit being 25 per cent. The payment schedule is treated as the contract. The Appellant measures up at the property before the building work on the house has been completed. This survey is the only work that the Appellant carries out at the property before construction of the conservatory commences; the Appellant checks for such items as drains and boiler flues, which may require an adjustment to the plans for the conservatory. The Appellant produces a plan of the conservatory; this is a computer-aided design. If necessary, the Appellant applies for planning permission on behalf of the client. (The approved plans for the development of the houses do not show the conservatories.) In most cases the provision of a conservatory is “permitted development” and does not require planning permission. In some cases permission is required, for example where the conditions of the planning permission for the construction of the house withdraw the scope for permitted development. Where the conservatory requires planning permission, the Appellant’s practice is to make the contract conditional on planning permission being granted; there had been one case where it had been refused and the Appellant had had to make a refund to the customer.
5.	To allow for the construction of the conservatory, the purchaser can where necessary ask that the developers leave unfinished minor tasks such as garden landscaping, external paving, turfing, internal floor finishes, heating and electrical work, until the conservatory has been built.
6.	Once the construction of the house has been completed or almost completed (subject to minor “snagging” works) and the sale has taken place, the Appellant starts work on the construction of the conservatory. In most cases it is not possible for the Appellant to go onto the site to start work at an earlier stage, so the earliest opportunity is the date of completion. (It might be possible to go onto the site before completion to bring the bricks in, or where the development is phased and the developer is working on the next stage.) There had been only one instance where the developer had written specifically to indicate that the Appellant could not come onto the site until the whole of the development work had been finished; the developer had said that this was for health and safety reasons. The works programme is partly dictated by the Appellant’s position as a small company with limited resources, particularly as it also does general building work. Stage payments are made under the contract when the conservatory base is completed and when the conservatory is delivered. (We note from the copy correspondence included in the bundle that the supplier of the conservatory to the Appellant treats that supply as standard-rated.) The final payment is made on completion of the conservatory. The average construction time is six to eight weeks.
7.	At the relevant time, Miss Bottomley was a member of a department of the Commissioners responsible for contacting businesses that had not previously been visited by the Commissioners. A junior member of the team had contacted the Appellant and had been told the Appellant’s view that the supply of the conservatories was zero-rated. A visit was arranged for 27 September 2002. The officers who made that visit were Miss Bottomley and Mr Smith. They interviewed Mr Dancy and the bookkeeper, and reviewed a selection of jobs that the Appellant contended were zero-rated. Their conclusion was that two jobs for which the work appeared on the original plans for the construction of the house were correctly zero-rated. They concluded that the work on the other jobs should have been standard-rated, and gave their reasons. These were:
(1)	the conservatory was not part of the original plans for the construction of the houses;
(2)	where necessary, separate planning permission had to be obtained;
(3)	Mr Dancy worked for the property purchaser, not for the developer;
(4)	the sale was completed before the conservatory was built;
(5)	the fact that certain minor jobs were not completed by the developer did not materially alter the position relating to completion of the property, that the property was complete before the conservatory was built.
8.	Mr Dancy referred to advice that he had received from a tax professional, and asked for the Commissioners’ view. Miss Bottomley agreed to review this question with the Commissioners’ policy branch. Following the visit, she did so, and was given the Commissioners’ view. (As the details of this view are a matter for the Commissioners’ submissions, we consider it below.) On 14 October 2002 she raised an assessment for £14,374 plus interest, and also wrote to the Appellant setting out the Commissioners’ view on the VAT liability in respect of the conservatories.
9.	On 12 November 2002, having taken professional advice, the Appellant requested a reconsideration of the decision. On 22 November 2002 DJ White of the Commissioners’ London Appeals and Reconsiderations Team wrote following the review; this letter upheld the decision taken by Miss Bottomley and the assessment made, and is the decision against which this appeal is made.
10.	In her oral evidence, Miss Bottomley confirmed that her understanding at the time had been that the developer would not allow the Appellant to enter the site to construct the conservatory. She was asked whether her view was affected by the evidence that there had been just one case in which the developer had refused entry. Her response was that it did not. The Appellant still did not start work on the conservatory until the construction of the property was complete, so the absence of a refusal by the developer was immaterial.
11.	She thought that if the construction work on the conservatory had instead taken place before the completion of the house, this would have moved the supply more towards being zero-rated. Merely waiting for the conservatory to come from the supplier after being ordered, or having the bricks on site, waiting for commencement, did not seem to her to be sufficient to say that the work had started. The physical work would need to have commenced. She thought that construction would need genuinely to have started, and that Mr Dancy’s example of simply digging one hole after the signing of the contract would not be enough to show this.
12.	She confirmed that at the time of the visit, the Appellant did not have the July 2002 version of the Commissioners’ Notice 708, “Buildings and construction”. Her interpretation was based on the examples given at paragraph 3.3.2 of that Notice, and she had used the bullet points as set out on the previous page of the Notice to weigh up when the construction was “complete”. She responded in cross-examination to questions relating to the timing of the contract and the tax point; as these points concern the legal position, we consider them below. On the question whether she accepted that most in the conservatory industry were zero-rating on the same basis as the Appellant, she said that she could not comment, unless she had made a visit to the businesses in question. She had acknowledged at the visit that there would be a financial disadvantage, but her view was that zero-rating was incorrect.
Arguments for the Commissioners

13.	(By agreement between the parties, the Commissioners’ case was presented first.) Ms Taylor referred to the legal framework. She referred to Item 2(a) and 4 of Group 5 of Schedule 8 to the Value Added Tax Act 1994. These were to be interpreted in the light of Note 16 to that Group. The Commissioners contended that the conservatories were enlargements or extensions. She referred to the Appellant’s grounds of appeal, set out in the Notice of Appeal. The first was that the decision had been based on an incorrect assumption, that the developers were not allowing the Appellant access to the site, and that the only reason for not starting the works prior to completion was the works programme. She maintained that this was an issue on the facts, the question being how much of a role this had played in the decision-making process. The second ground of appeal related to the time of supply of the conservatories; the Appellant’s case was that they were supplied during the course of construction of the properties, and were therefore liable to VAT at the zero rate, falling outside Note 16. The Appellant had referred to the decision in University of Hull v Customs and Excise Commissioners (1975) VAT Decision 180 to define “course of construction”. In that case the Tribunal had examined the meaning of the phrase “in the course of construction” in the previous legislation (Item 2 of Group 8 of Schedule 4 to the Finance Act 1972), which was in similar terms to that in the Value Added Tax Act 1994. The Tribunal had held that a building continues to be in the course of construction until the main structure is complete, the windows have been glazed and essential services and fittings have been installed. The Appellant’s contention in the present case was that because the point at which it entered into contracts with the purchasers to supply the conservatories fell during the period when the houses were in the course of construction, the supplies were liable to VAT at the zero rate. Ms Taylor submitted that this was not the relevant issue for the purpose of deciding the liability to VAT of the supplies made. The relevant issue was whether the construction of the conservatory in each case amounted to an extension or enlargement of an existing building. The Commissioners’ submission was that the fact of payment, contract and invoice all falling prior to completion did no more than to create a tax point. This determined when the tax was due; it did not in any way affect the position concerning the liability of the supplies. Ms Taylor submitted that all the relevant factors should be considered when deciding whether the construction of the properties was complete so as to render them existing buildings prior to the construction of the conservatories. The fact that the contracts were entered into during the construction of the properties was only one factor to be considered; it could not be determinative of the matter. Taking into consideration all of the relevant factors and applying the test in University of Hull, she submitted that the construction of the houses was complete prior to the supply of the conservatories. The supply of the conservatories therefore comprised an enlargement of or extension to an existing building and should be taxed at the standard rate. She cited Regulation 93(1) of the VAT Regulations 1995, and contended that it merely determined when the VAT was due to be paid, the tax point; it had no bearing on the issue of whether the supply should be standard rated or zero-rated for the purposes of VAT.
14.	The issue was whether the supplies fell within Note 16; the Commissioners contended that they did, while the Appellant contended that they did not. The Appellant referred to one factor as determinative, the contract and initial payment falling at a time when the houses were under construction, as justification for treating the supply as zero-rated. Ms Taylor submitted that this was not correct. All the relevant factors should be considered, and all of them weighed in the balance. This had been Miss Bottomley’s approach, and Ms Taylor submitted that this was correct.
15.	She referred to the relevance and status of Notice 708. It was simply a notice intended to give guidance to traders. The use here had been that in considering the facts and the legislative provisions, Miss Bottomley had also taken into account paragraph 3.3.2 of the Notice. Ms Taylor submitted that the Notice could not override the legislative provisions; it merely amounted to guidance. This version of Notice 708 had been issued in July 2002; this was before the visit, the decision and the assessment, so it was the relevant guidance prevailing. She submitted that the fact that the Appellant had not been aware of this version until later was irrelevant. It was necessary to look at the law and facts as they were and as they had been at the time. The guidance was that and nothing more. It was not the basis on which the decision had been made.
16.	Mr Dancy had referred to business other than that of the Appellant, both a past business and a current business, and said that in similar circumstances different decisions had been made. Ms Taylor submitted that this was not relevant. Only the circumstances of this particular case should be examined. It was not appropriate to consider facts and matters relating to other traders; there was nothing before the Tribunal concerning these other businesses. The decision should be made relating to this case only.
17.	She referred to the facts as the basis for Miss Bottomley’s decision. The Appellant’s argument tied liability to the entering into of the contract for the conservatory after the exchange of contracts for the purchase of the house. Ms Taylor submitted that on the facts, the work was done after the construction of the houses was complete.
18.	The question in University of Hull had been whether the supply and fixing of floor tiles was zero-rated. Ms Taylor submitted that the houses were complete at the time the supplies relating to the conservatory were made. Entering into the contract before completion of the building was only relevant to the creation of a tax point, as already explained, which related only to the question when the tax was due to be paid. Ms Taylor sought to pursue a logical extension of the Appellant’s argument. If it were assumed that planning permission was necessary for a conservatory, and that refusal occurred after the contract for the conservatory had been entered into, this would mean (on the Appellant’s argument) that the supply had already taken place and that the Appellant could not “back out”. Ms Taylor argued that this could not have been the intention. (This argument was put at a stage before Mr Dancy indicated the Appellant’s standard practice of making the contract conditional where planning permission was required.) In establishing whether the houses were complete at the time when the work started, the critical factors were those mentioned by Miss Bottomley when giving Mr Dancy the Commissioners’ view (see paragraph 7 above). Ms Taylor submitted that the decision reached was correct.
19.	She referred to the decision in Andrew Gordon Simister and Winifred Simister (1994) VAT Decision 12715. This was a similar decision to that in the present case. The Tribunal held that the arrangement for the vendor to leave work outstanding to facilitate further work to be carried out by the purchasers did not negative the conclusion that on the completion of the contract the vendor handed over a completed building. The Tribunal also held that the provision of the conservatory amounted to the enlargement of an existing building. The legislation had been similar to that in the present case.
20.	Ms Taylor asked that the decision should be held to have been properly made, that the assessment should be held to have been made to the best of the Commissioners’ judgment, and that the appeal be dismissed.
Arguments for the Appellant

21.	Mr Dancy relied on the Appellant’s case as set out in the Notice of Appeal. He stressed that the version of Notice 708 that he had had when he started in 1998 was different. None of the information contained in the current version had been in the earlier version, the one that he had had before the VAT inspection. He explained that before starting the current business, he had sold an interest in a larger company. The principle of zero-rating in relation to conservatories had been discussed in relation to that company. He had told the VAT officer at an inspection in relation to that company about the way in which the work was arranged; the officer’s views had not been given in writing, but the officer had accepted the position provided that the deposit was substantial. Mr Dancy pointed out that he had been told in relation to the current business that he could not rely on this previous advice; he had to accept this. Nothing had been challenged in relation to the current business from the beginning until the telephone call from Miss Bottomley’s colleague on 15 August 2002. This had been followed by the VAT inspection. The Appellant’s accountant had then consulted a tax adviser, who had given the advice reflected in the Notice of Appeal. The reason for starting with zero-rating had been that the contract was signed before completion of the building; that was the tax point. The issue of the invoice or the making of payment overrode the normal time of supply. The invoices were issued at stages before the work was complete. He gave an example. Assuming that a contract was entered into on 1 January, the client would pay a 25 per cent deposit. If the work was finished on 1 March, and the full amount was paid, this would be related back to 1 January, which was while the house was in the course of construction. The alternative position was that there were two tax points. He accepted that if an approach were made to a client after the building was complete, the supply in such a case could never be zero-rated.
22.	He referred to the first example given at paragraph 3.3.2 of the current version of Notice 708. This concerned refusal by the developer of access to the conservatory supplier until after the building work had been completed and the property had been conveyed to the purchaser. The supply of the conservatory could not be zero-rated. He accepted that this was the correct treatment, as in the one case that he had had where the developer had refused access for health and safety reasons; the supply had been treated as standard-rated.
23.	Miss Bottomley’s notes mentioned a company called Fincrest Limited. This was a ready-made company that he had acquired. It did all the conservatory work from February 2002 onwards. The Appellant was still doing small jobs and windows. The letter from the developer refusing access had been addressed to Fincrest Limited. Mr Dancy explained that this company had had a VAT inspection in about February 2004, by the same office as had inspected the Appellant. The company’s trading arrangements were similar to those of the Appellant. On 6 February 2004 the Commissioners had written to the company indicating that there were no problems; it had been another VAT officer approving the position. That officer had been happy with the arrangements. Mr Dancy argued that the treatment of the supply of conservatories was a very “grey area”.
24.	He drew attention to a copy letter from NHBC addressed to the Federation of Master Builders. This indicated that NHBC’s records would show a house as still under construction until they issued a cover note following a successful pre-handover inspection. Such a cover note could be issued when there were minor works outstanding, but these would not be considered detrimental to the safe enjoyment of the home, which could otherwise be considered complete for all practical purposes. Mr Dancy stressed that the transactions relating to the conservatories all happened before the cover note certificate was issued by NHBC.
25.	Mr Dancy questioned how the Simister decision, which was one concerning the “DIY builders’ scheme”, could be regarded as similar to the present case. On Ms Taylor’s hypothetical example relating to a conservatory requiring planning permission, the Appellant’s practice was that the contract would be made subject to planning permission, so that the supply would not happen. He accepted that much of Ms Taylor’s argument appeared to be correct. He could only make decisions based on what information he had had at the time. He questioned why VAT control visits to new businesses did not occur within eighteen months of a business commencing; it would have meant that the figures in question would have been less. He did not consider that this was an “open and shut” case. His belief was that the contract was the primary matter; that was the advice that he had been given. Questions relating to other companies should not readily be ignored. He pointed out that the Appellant had had no advantage from the arrangements, as it had not had the VAT from its clients. In relation to the control visit for Fincrest Limited, there had been no reference to the treatment of conservatories, but he had answered every question raised by the officer. Mr Dancy also indicated that the arrangements used by the Appellant were custom and practice within the industry. A trader treating the supplies as standard-rated would be up against unfair competition. It would not be fair to give names, as this would invite inspections. If a quotation for a conservatory for a “new build” house were requested, it would be given without any reference to a charge to VAT of 17.5 per cent. He accepted that if it were correct to impose a standard-rated charge in such circumstances, and if accordingly the industry were to be notified generally, this would create a “level playing field”. In summary, he contended that the appeal should be allowed and the supplies treated as zero-rated.
Discussion and conclusion

26.	The subject matter of the supply is clear; this was the provision of the services involved in constructing the conservatory. The question is what was the character of that supply. Was it a supply of construction services in the course of construction of a dwelling, or was it an enlargement of, or an extension to, an existing building? On the facts as found, the building of the house was complete (or virtually complete) when the work on the conservatory started. The stage payments were made as the stipulated points in the construction were reached, all these (other than the initial deposit) falling after the commencement of work on the conservatory. Was the character of the supply affected by the fact that the contract was signed, and the initial 25 per cent deposit paid, before the construction of the house was completed? For this to be the case, it would be necessary to read the “time of supply” rules as having a dual function; in addition to establishing the point by reference to which a tax liability arises, they would have to be capable of influencing the nature of the supply.
27.	There is no obvious basis for interpreting the time of supply rules as doing more than establishing the tax point for liability purposes. However, if their function is to be accepted as limited in this way, these rules could create difficulties in some circumstances. Assume that the Appellant entered into a contract at a point when the building work on the house was not complete. On the Commissioners’ argument, the Appellant should treat the payment of the initial deposit as the initial standard-rated supply under the contract. If (contrary to the Appellant’s existing practice) the purchaser negotiated with the developer to allow the Appellant to start work before the developer’s work on the house was anywhere near complete, and the Appellant did commence and carry out a substantial amount of work at that point, it appears to us that the Appellant’s supplies (or at least a significant proportion of them) would then be in the course of construction of the house rather than construction of something capable of being described as an “existing building”. It would follow that the supply (or the relevant proportion of that supply) was zero-rated, and the question of the standard-rated charge imposed on the initial supply would need to be revisited. (This would presumably require a claim to be made by the Appellant for the recovery of overpaid VAT, under section 80 of the Value Added Tax Act 1994.)
28.	Do such difficulties justify an extended interpretation of the time of supply rules? We do not think so, as there is a basis for the recovery of the tax that should not, after all, have been paid. We have not been able to find any examples of cases in which the time of supply rules have been read as influencing the nature of the supply. We therefore consider that the steps of entering into the contract and receiving the initial deposit at a time when the house is still under construction cannot, by themselves, amount to any indication of whether the supply is standard-rated or zero-rated. Our view is that this must be tested by reference to the time when the work on the conservatory is carried out. On the practice that the Appellant has adopted up to now, the work is carried out after the building work by the developer has been completed. (Whether it is possible for the Appellant to arrange for its customers to negotiate with the developer to permit work to commence before completion of the building is a commercial question on which we are not in a position to express a view. If such a change of practice were possible, it would be advisable for the Appellant to obtain the agreement of the Commissioners to any revision of the trading arrangements, and for this agreement to be recorded in writing. In particular, it would be necessary to reach clear agreement on the latest stage at which commencement of work on the conservatory would meet the requirements for zero-rating under Item 2(a) of Group 5.)
29.	On the basis of the Appellant’s existing practice as evidenced by the supplies under appeal, our conclusion is that the requirements for zero-rating are not met. The work of constructing the conservatory only takes place after the house is completed (or substantially completed, subject to “snagging” matters). Applying the test in University of Hull, the house is no longer in the course of construction when the work on the conservatory starts. As a result, this work amounts to the alteration or enlargement of an existing building. The Commissioners’ decision as set out in their letter dated 22 November 2002 is therefore correct, and we must dismiss the appeal.
30.	In doing so we are conscious of Mr Dancy’s arguments as to the practice within the industry. We accept, as Ms Taylor argued, that our decision must be confined to the matter on appeal before us, and that we had no evidence as to the position of other taxable persons making similar supplies. We also recognise that detailed practices and working methods may differ in apparently small, but possibly significant, respects as between those involved in the industry. It would be a matter of concern if, assuming that supplies were made on similar terms by different persons within that industry, they were not treated in the same way. It would be reasonable for those adopting the same trading methods to expect consistency of treatment. We accept that if there were a general indication of the Commissioners’ approach to such supplies, it might take some time for all traders to make the necessary adaptations, but we have a great deal of sympathy for Mr Dancy’s wish to have a “level playing field”.
31.	We are also conscious that the Appellant is unlikely to be able to persuade its clients to make any further payment to cover the standard rate VAT assessed in respect of these transactions. This means that the Appellant suffers the full burden of the charge, whereas if the transactions had been treated from the beginning as standard-rated, the clients would have paid the VAT. (We appreciate that if it had been customary for these supplies to be regarded as standard-rated, this might have had some effect on the prices which clients would have been prepared to pay, so it is open to question whether the Appellant’s loss is the full amount of the VAT.) If the result of the existing industry practice has been that clients do not expect a VAT charge to be added to the costs of the conservatory, it would need to be made generally known that this practice can no longer be followed, so that these supplies are shown as standard-rated unless in the particular circumstances they can be shown to meet the conditions for zero-rating. Appropriate publicity would be needed to ensure that all parties treated conservatory supplies consistently for VAT purposes.
32.	Our remaining concern is Ms Taylor’s comments as to the Commissioners’ guidance. If she was merely saying that such guidance is not legally binding and that it cannot override the law, we do not disagree. The necessary elements are, as she argued, the law and the facts as they were at the time of the supplies in question. However, traders do rely on the guidance issued by the Commissioners, and it seems to us that if traders follow such guidance, this should not be discounted. In the present case, the Appellant was not relying on the version of the guidance current at the time of the supplies in question. It is unfortunate that the Appellant does not seem to have been made aware of the existence of the revised guidance until a later stage. We share the Appellant’s concern that initial control visits do not happen early enough after the commencement of a trader’s operations, leading to a delay in the Commissioners giving their view as to the VAT position of those operations. Even if the Appellant had seen the guidance before entering into the contracts with its clients for the supplies under appeal, that guidance does not in our view go far enough to deal with the point at issue in this appeal. The one example given at paragraph 3.3.2 of Notice 708 (July 2002) that relates to a conservatory is where the developer refuses the conservatory specialist access to the site until after the developer has finished his work. This example does not give guidance for a case in which access is not refused, but where the work only commences at a later stage. Guidance is needed for such cases, and in particular an indication as to what stage before the building of the house was completed that construction of the conservatory would need to commence in order for it to qualify as a zero-rated supply of construction services.
33.	We hope that our comments can be taken into account in relation to future supplies of conservatories. However, they cannot assist the Appellant in relation to the Commissioners’ decision in the present case, or the assessment made. As already indicated, the appeal is therefore dismissed. No application was made in respect of costs, and we make no order.

JOHN CLARK

CHAIRMAN

LON/02/1114