A recent First-tier VAT Tribunal (FTT) decision has resulted in a change of HMRC policy regarding the installation of blinds in new residential dwellings. (Wickford Development Co Ltd (Wickford) (Decision No TC2017/08197 and TC2018/03555)
Previously, blinds have been classed as ‘not building materials’. This meant that the VAT on blinds fitted to new dwellings was blocked and could not be reclaimed.
HMRC has accepted the FTT’s decision that manual window blinds and shutters are considered building materials for VAT purposes, this means they can now be zero-rated when installed in a qualifying build. The change is effective from 05 October 2020.
The zero rating covers all manual window blinds and shutters, but does not include any blinds that are motorised, and does not include curtains.
HMRC will allow businesses to make an adjustment for any VAT incurred on blinds installed in new dwellings that was previously disallowed, subject to the four-year time limit. Any such adjustments are also subject to the unjust enrichment rules, so if you passed the cost of the unrecoverable VAT on to your customer and suffered no financial loss yourself, you will not be able to claim.
If you think this change may have affected you, and would like to know more, please contact our VAT Team.
See Revenue & Customs Brief 5 (2021): VAT liability of installation of blinds for further detail on this subject.