LOCKHEED MARTIN UK LIMITED v Revenue & Customs (VAT - zero rating - modification or conversion of aircraft)

VAT - zero rating - modification or conversion of aircraft - supply of airborne surveillance and control system - additional role for existing aircraft - use of role-fit kits - whether modification or conversion - jurisdiction of Tribunal to reach decision on basis other than one put forward by parties - unusual importance of burden of proof - Item 2, Group 8, Schedule 8, Value Added Tax Act 1994

The hearing took place on 4 to 7 May 2020, with written submissions being made by the parties, at the direction of the Tribunal, following the hearing. With the consent of the parties, the form of the hearing was V (video) on the Tribunal�s Video Hearing Service. A face-to-face hearing was not held because of the impact of the COVID pandemic. The documents to which we were referred were an electronic hearing bundle of 1504 pages.

Pursuant to a direction given by Judge Poole on 22 October 2018 under Rule 32(2)(a) and (c) of the Tribunal Procedure (First-tier Tribunal) (Tax Chamber) Rules 2009 (SI 2009/273), the hearing was held in private.

James Puzey, counsel, instructed by the General Counsel and Solicitor to HM Revenue and Customs, for the Respondents

             The Appellant (�LMUK�) appeals against HMRC�s decision dated 16 November 2017 that supplies made by LMUK to the Ministry of Defence (�MoD�) were standard rated. The appeal has been classified as �complex�.