HERE WE HAVE A PRINCIPAL ELEMENT- THE CONSTRUCTION WORK-ANDA SECONDARY ELEMENT, DESIGN FEES. WHY SHOULD THE DESIGN FEES NOT BE CHARGEABLE TO VAT?

摘要

However, the European Court of Justice (ECJ) ruling in the 2006 case of Talacre Beach Caravan Sales Ltd vs Commissioners of Customs and Excise brought this issue into the spotlight. Talacre supplied caravans that were fully equipped with removable equipment. The current VAT rules allow for the supply of caravans to be zero-rated. Talacre claimed that the removable equipment should also attract the zero-rating. The ECJ disagreed and concluded that the goods in question were to be treated as a single supply comprising a principal item (in this case the caravan), which is subject to the exemption and other items that do not attract the exemption. The fact that the caravan is VAT exempt does not prevent the equipmentbeing chargeable.