19476
	ZERO-RATING — construction of a bridge by a charitable trust — item 2(a) Group 5 Schedule 8 VAT Act 1994 — is a bridge a building — no — appeal dismissed

MANCHESTER TRIBUNAL CENTRE

 
 	
	UPPER DON WALK TRUST	Appellant

	- and -

THE COMMISSIONERS FOR
	HER MAJESTY’S REVENUE AND CUSTOMS	Respondents

				Tribunal:	Lady Mitting (Chairman)
						Marjorie Kostick BA FCA CTA 

Sitting in public in Manchester on 30 January 2006

Dr Alan A Wood for the Appellant 

Miss H Redmond, counsel, instructed by the Acting Solicitor for HM Revenue and Customs for the Respondents 

	© CROWN COPYRIGHT 2006

DECISION

1.	The decision under appeal is that of the Respondents that the proposed construction of a bridge by the Appellant does not qualify for zero-rating under the provisions of Item 2, Group 5, Schedule 8 of the VAT Act 1994, the basis of their decision being that neither was the bridge a building nor was it intended solely for a relevant charitable purpose.
Facts
2.	The facts were not in dispute and were set out very succinctly in a written submission put in by Dr Wood, supported by documentary evidence and photographs.
3.	The Appellant is a registered charity established for “The provision of facilities in the interests of social welfare for recreational and leisure time occupation of the public with the object of improving their conditions of life, particularly through the provision of a walkway along the river Don ..” (the Memorandum of Association).  The Memorandum goes on to give the Trust power to “… provide any essential bridge crossings or structures giving access to the river and related amenities along the route of the pathway …”.  
4.	A pathway has been created along the banks of the river and the Trust formed the view that a bridge was needed on the pathway to link Kelham Island, the site of Sheffield Industrial Museum, with Brooklyn Works, a factory site built up in the 1830s and now an educational tourist attraction. We were told that a visitor centre is also being prepared, with a view to the whole complex forming a permanent learning area for the benefit of children and young people.
5.	The original industrial site had extensive links with Brooklyn, New York and the Trust decided that it would be appropriate for the bridge to be a one tenth scale replica of the New York Brooklyn Bridge.  Not only would this fit the site dimensions perfectly but would enhance the surroundings and create a powerful visitor attraction.  As designed therefore, the bridge would be a suspension bridge serving pedestrians and cyclists.  At each end would be brick towers in the form of a double gothic style arch through which the bridge is accessed.  The tension of the suspension cabling varies according to temperature and is designed to self adjust as necessary, without human intervention.  The machinery allowing this to be done would be contained within the pillars of the towers.  These chambers were described as very small, not permitting human access and any repair or servicing would have to be done from outside.
6.	On 22 July 2005, Dr Wood wrote to the Respondents outlining the scope of the scheme and asking for confirmation that the work would qualify for zero-rating.  Dr Wood’s letter was dealt with by Mr J Tolan and having clarified with Dr Wood that the Trust would not make any charge to persons using the bridge, Mr Tolan replied to Dr Wood in the following terms:
“The bridge will be available for use by cyclists and pedestrians for no charge.  The bridge therefore will be a building intended solely for use for a relevant charitable purpose and the services of constructing the bridge will qualify for zero rating. ‘The legal basis for this is the VAT Act 1994, Schedule 8, Group 5 Item 2(a)”.
7.	On 15 August 2005, the Hon. Treasurer of the Trust, Mr Adrian Ostrowski wrote again to Mr Tolan pointing out that, once constructed, the bridge would be “adopted” by Sheffield City Council and that the charity would therefore have no further responsibility for insurance and maintenance.  His question to Mr Tolan was whether or not this would affect the zero-rating position.  Mr Tolan replied by letter dated 25 August 2005 to the effect that since his original ruling, he had sought guidance from headquarters and their advice was that his original view had been incorrect.  The Respondents revised position was summed up by Mr Tolan as follows:
“2.	The law does not define “building”, so we look to case law to establish what the word means.  In the Tribunal case of Dr John Parkinson [16527] the word ‘building’ was considered and the new Oxford Dictionary of English definition of ‘building’ was used, this being: ‘a building is a structure with roofs & walls such as a house, school or factory’.
3.	Our Policy branch therefore take the view a building must have walls and a roof and you must be able to enter it.
4.	The new bridge is therefore considered not to be a ‘building’ but to be a civil engineering work.
5.	Accordingly, the construction of the bridge cannot come within the zero-rating provisions of Item 2, so must be standard-rated.”
8.	Further correspondence followed as to the meaning of “building” and the Respondents also at this stage took up the point that as the bridge was to be adopted after construction, it would no longer be used by the charity but by the Council and would not therefore come within the definition of “use for a relevant charitable purpose”.  Still further correspondence ensued in relation to both points but the Respondents did not change their view in relation to either and there the matter rested until the arguments were presented to the tribunal. 
9.	One document was put before us which the Respondents had not had the benefit of seeing previously and that was a letter dated 20 January 2006 from Sheffield City Council confirming that all they would be doing in their “adoption” would be to undertake to maintain the bridge and would not be assuming ownership of it.  It would remain the property of the Appellant Trust.  We understand that this is the position also with regard to the pathways which have been created.  They are operated and owned by the Trust but maintained by the Council.  The Council would therefore have no operational control over the use of the bridge.  Barring maintenance, for all other purposes, the bridge would remain the property of the Trust and it would be used under their directon.
Legislation
“Item 2(a), Group 5 to Schedule 8 of the VATA 1994 zero-rates, ‘the supply in the course of a construction of —
(a) 	A building designed as a dwelling or number of dwellings or intended solely for a relevant residential purpose or a relevant charitable purpose ‘ … …
Note 6 to Group 5 explains the meaning of ‘Charitable purpose’ as ‘use by a charity in either or both the following ways, namely (a) otherwise than in the course or furtherance of a business; (b) as a village hall or similarly in providing social or recreational facilities for a local community.’” 
Submissions
10.	The Respondents raised two reasons why the construction of the bridge should not attract zero-rating.  First, a bridge was not a building and secondly, it was not for a relevant charitable purpose.  Quite separate arguments apply and we will deal at this stage with whether or not a bridge is in fact a building within the context of Item 2(a).  
11.	Miss Redmond contended that in the absence of a statutory definition, one looks at what the reasonable person would think.  She contended that had parliament intended the construction of bridges to be exempt then it would have been incorporated within a particular group and it is not.  She went on to say that it was not proper or right to assimilate into one piece of legislation a definition contained in other legislation.
12.	Dr Wood relied on a number of factors.  He relied on the dictionary definition, to which we refer in greater detail below.  Secondly, he drew to our attention the interpretation of “buildings” in the legislation for Industrial Buildings Allowance and for listed buildings purposes.  He drew our attention to the explanatory notes published by HM Revenue & Customs which accompanied the Capital Allowances Act 2001.  In the notes, the scope of Industrial Buildings Allowance is specifically said to include “buildings and structures like tunnels, bridges and roads”.  Equally, he pointed out that the Town and Country Planning Acts interpreted buildings to include any “structure or erection and any part of a building, as so defined …”.  Thus, planning regulations would apply to any kind of building or structure.  
13.	Dr Wood also addressed us on the popular perception of the word “building”.  He referred to a Channel 4 television programme entitled “Building of the Year”.  This programme awarded the Stirling Prize, Britain’s most prestigious prize for architecture and which in the remit of the programme was “awarded annually to the architects of the building which made the greatest contribution to British Architecture in the past year”.  Not only are bridges accepted as entries into the competition but in 2002 the Gateshead Millennium Bridge won.  Equally, the BBC presented a series entitled “Britain’s Best Buildings”.  This listed the five all time favourite buildings and they included the Forth Bridge.  
Conclusions
14.	A “building” is not defined in Schedule 8, Group 5 and it must therefore be given its natural and ordinary meaning.  Dictionary definitions are extremely wide and vary.  The Oxford English Dictionary defines a building as “that which is built; a structure, edifice: now a structure of the nature of a house built where it is to stand”.  Chambers give the definition: “the art, occupation or process of erecting houses etc; a substantial structure for giving shelter, example a house, office block”.
15.	The dictionary definition is plainly too wide for our purposes. For example a ship is “built” but is clearly not a building.  A multitude of things are structures, which is a very wide word, but are not buildings.  It is accepted by Dr Wood that one limitation is that a building has to be immovable.  In our view, the word ‘building’ connotes an enclosure of sorts.  It will enclose a volume of space or provide a place within which persons or things can be accommodated. All the structures which, in ordinary speech would undoubtedly be regarded as buildings have this characteristic in common: for example a house, a factory, a warehouse, an amphitheatre.  A building will usually have walls and, although not invariably, a roof.  All these structures enclose a volume of space and provide a place within which something can be accommodated and by any view must be regarded as “buildings”.  In each example, the dictionary definition refers to it being a building.  The shorter Oxford English Dictionary refers to an amphitheatre as “an oval or circular building …”.  A factory is defined as a “a building or buildings with plant for the manufacture of goods …”.  A house is defined as a “a building for human habitation.”  By contrast, the SOED definition of a bridge is “a structure forming or carrying a road over a river, a ravine etc or affording passage between two points at a height above the ground”.  Nowhere in any of the extended or alternative definitions is a bridge referred to as a building.  A bridge does not enclose a volume of space or provide a place within which anything can be accommodated.  Its purpose is purely and simply to be a means of access from one side of something to another.  Some celebrated bridges do include buildings but these are normally buildings which are erected onto the bridge and do not alter the nature of the bridge itself.
16.	The bridge with which we are concerned has chambers at each side which house the suspension machinery.  These chambers are not only minute in scale and really serve no more than an encasement to the machinery but are also ancillary to the purpose of the bridge and do not alter its essential nature.
17.	It is our view that in the ordinary meaning of the word, a bridge is not “a building”.  
18.	Dr Wood went on to cross refer to other legislation. As a general rule, a definition of something contained in one statute does not help in construing the same word in a different statute which was enacted for an entirely different purpose and we do not believe here that the interpretation used for the purposes of Industrial Building Allowance or in planning legislation is of any assistance as the contexts are so different.  Referring specifically, however, to Section 271 Capital Allowances Act 2001, we note that it refers throughout to the construction of a “building or structure”.  Section 271(2)(a) then says “building” is short for “building or structure”.  In other words, to us, the legislation intends to draw a clear distinction between buildings and structures.  And indeed this is supported by our interpretation of the explanatory notes referred to by Dr Wood as defining the scope of the Allowance as being for, on the one hand, buildings and also, on the other hand, for “structures like tunnels, bridges and roads”.  In other words that legislation appears to be including a bridge as a structure but not as a building.  Indeed it is used in the same phrase as a road which quite clearly, however one views it, cannot be a building.  
19.	The planning legislation concerning listed buildings has a quite different aim which is to safeguard and preserve an enormously wide range of structures which are of ancient, historical or architectural interest.  That is why the interpretation in that legislation is so wide.  We note that in Group 6 of Schedule 8, a protected building is defined very widely by reference to the planning legislation and also to include a scheduled monument (Note 1).  That no similar definition and indeed that no definition at all is given in reference to Group 5 supports our view that the word “building” should bear its ordinary every day meaning.  
20.	Dr Wood’s final argument concerned the media representation of buildings in television programmes.  Again, we do not believe this helps much in our case.  We have been given no indication of the criteria for entry into the “Building of the Year” competition but as it is an award for architecture, we assume that it is probably open to any architecturally designed structure.  The mere fact that all entries are referred to under the blanket term “buildings” does not help in the construction of VAT legislation, likewise the BBC programme. 
21.	For all these reasons, we find that a bridge is not “a building” within the context of Item 2(a) of Group 5 and the proposed construction is therefore not capable of qualifying for zero rating.  Given this view, it is not necessary for us to go on to consider whether or not the construction was for a relevant charitable purpose.  
22.	The appeal is therefore dismissed.  The Respondents made no application for costs and we make no order.
23.	In closing, could we thank Dr Wood for the manner in which he presented his case.  His fully documented proof of evidence was cogent and well argued and his entire case was very well put in support of what clearly is an admirable project.  It is with regret that we have come to the conclusion which we have.

LADY MITTING
CHAIRMAN
Release Date: 27 February 2005
MAN/05/0716