Research Establishment  v Revenue and Customs [2005] UKVAT 19095 (19 May 2005)

19095
Value added tax – zero-rating – charities, etc – whether goods used in laboratories were “laboratory equipment” - yes 

LONDON TRIBUNAL CENTRE

RESEARCH ESTABLISHMENT	Appellant

- and -

HER MAJESTY’S REVENUE AND CUSTOMS 	Respondents

Tribunal:	  Dr. David Williams (Chairman)

				

Sitting in London in private

© CROWN COPYRIGHT 2005

DECISION

1	On the joint application of the parties the tribunal, having considered the terms of the Value Added Tax Tribunal Rules 1986, ruled that all stages of this appeal should be in private and that all identification details in the decision and directions of the tribunal should be anonymised.  
The issue in dispute
2	The appellant research establishment (“RE”) conducts medical research. For this purpose it maintains research laboratories. It arranged, under a staged payment contract, for contractors to replace what was referred to by the parties as an air ventilation system (referred to in this decision as “the Equipment”, it being agreed by both parties that the system was for these purposes equipment) for part of a laboratory complex. RE took the view that the supply and installation of the Equipment was a supply of laboratory equipment and should, as the other relevant conditions were met, be zero-rated for value added tax (VAT) purposes. The respondent Commissioners (then the Commissioners for Customs and Excise, and referred to in this decision as “Customs”) did not agree.  RE reconsidered its position, and took the view that if the Equipment was not laboratory equipment, then it should properly be viewed as accessory to laboratory equipment. An officer of Customs viewed the laboratory complex, but concluded that the Equipment was neither laboratory equipment nor accessory to such equipment. In consequence it was decided that the supply and installation of the Equipment was liable to VAT at the standard rate. RE appealed that review decision. The issue for the tribunal is therefore whether the Equipment is either laboratory equipment or accessory to such equipment.
The appeal
3	The tribunal, which included a member with directly relevant professional experience, held an oral hearing of the appeal at which both parties were professionally represented. The tribunal was shown extensive documentary evidence, and heard oral evidence or received formal written evidence from key members of RE’s staff, from the design consultant who advised RE on the design and installation of the equipment, and from Customs’ review officer. It was provided with full information by the parties, and was taken on a site visit that included seeing the Equipment as installed in a number of parts of the relevant laboratory complex. The tribunal records that it is satisfied that both parties provided the tribunal with full evidence and information on all matters relevant to its decision. It accepts that the oral evidence given to it for both parties was in each case given openly and without reservation to the extent that the witness could properly answer the questions asked. Accordingly the tribunal accepted the witness evidence including, to the extent relevant, the expert evidence of the design consultant on how the Equipment in this case compared to other air ventilation and air conditioning systems. 

The law
4	Section 30 of the Value Added Tax Act 1994 provides that the supply of goods and services is zero-rated only if a provision in Schedule 8 to the Act applies. It is common ground that only one such provision can apply in this case, namely Item 5 of Group 15 of Schedule 8. This includes within the Schedule:
The supply of any relevant goods to an eligible body which pays for them with funds provided by a charity or from voluntary contributions or to an eligible body which is a charitable institution providing care or medical or surgical treatment for handicapped persons. 
It is common ground that RE meets all the conditions laid down in Item 5 save only whether the Equipment is a “supply of any relevant goods”. The tribunal therefore considered only that aspect of Item 5.
5	Note 3 to Group 15 offers a definition of “relevant goods”. RE contends that the equipment is within either paragraph (a) or paragraph (c) of that definition. These are:
(a)	medical, scientific, computer, video, sterilising, laboratory or refrigeration equipment for use in medical or veterinary research, diagnosis or treatment.
And
©	parts or accessories for use in or with goods described in paragraph (a) …
6	That definition is one that has been modified from time to time both to take account of previous tribunal decisions and in the light of experience. As the effect of those changes has been to broaden the test and at the same time deal with what were seen as weaknesses in the original terms, the tribunal considers it relevant to note the original version. This was considered by a tribunal chaired by the then President, Lord Grantchester QC, in Clinical Computing Ltd v The Commissioners, [1983] VATTR 121.  At that time, paragraph (a) was:
(a) medical or scientific equipment solely for use in medical research, diagnosis or treatment;
and what is now paragraph © was:
(d) parts and accessories designed solely for use in or with goods described in paragraph (a) … above.
It can be seen that the definitions have been expanded both in the list of specific kinds of equipment and in the kinds of activities for which the equipment can be used. The first of those expansions was as a result of the Clinical Computing case itself, as the tribunal in that case ruled that the then description did not cover computer equipment but took its decision “with some regret”. The other significant alteration is the removal from the test of the restriction to equipment “solely” for use as defined. In the tribunal’s view the removal of that link leaves the use of the equipment as a question of fact. It also removes, as a matter of law, the definitional linkage between equipment and its use.
7	In this case it is common ground that the Equipment was used for a purpose within Item 15, so the tribunal does not have to consider that question further. It needs to consider only if the Equipment was “laboratory equipment” or “accessory” to such equipment.  
8	In doing so, the tribunal accepts two propositions put to it for Customs. First, its task is to interpret, and not to rewrite, the Item. As was noted in argument, a number of tribunals have expressed views about the extent of the Item. Parliament responded directly to some of these comments. But it is not for the tribunal to take that legislative duty on itself. Second, and linked with this, there is a restraint on Parliament because of the nature of zero-rating. It is a derogation from the terms of European Union VAT law authorised only by Article 28 of the EC Council Sixth VAT Directive. For this reason the Item, as part of that derogation, should not be interpreted or applied too liberally.
9	The related question of whether goods were “medical equipment” was considered by Owen J in Customs and Excise Commissioners v David Lewis Centre [1995] STC 485.  The factual issue in disputes was whether certain two-way observation windows were, to use the term in the judgment, “medical goods”. The case was argued before Owen J only by Kenneth Parker QC for Customs, and not by the Centre, and the judgment is, perhaps for that reason, brief. The relevant part of it is:
“The question becomes: were the windows when supplied medical goods? The way in which the tribunal approached this matter was to say that clearly the function was medical and therefore the goods were medical. Mr Parker argues that that is not the correct interpretation of that which is contained in Sched 5. The goods, he says, must not only be intended for exclusive use in medical diagnosis or treatment (I omit the words which are not relevant here), but also they must be designed for such use. In other words, there is a test which is twofold; first, the goods must be medical; and secondly they must be supplied for use in one of the medical areas which is set out in the definition. Clearly “medical” must be given some meaning. If the meaning was that any goods which are for use in diagnosis or treatment are to be considered as medical goods, then it would not be necessary to add the words after medical, “scientific, computer, video” since clearly if a computer was supplied for use in diagnosis, then it would be a medical good supplied in accordance with Group 16 [now Group 15].  Therefore there must be some meaning to “medical”….
The way in which the tribunal in Clinical Computing Ltd dealt with the matter was this. It was accepted, it was said, by Customs, that the computer system – at that time the word “computer” did not appear in the definition of “relevant goods” – had been supplied solely for use in medical research, diagnosis or treatment, but the decision had been that the computer system was not medical or scientific equipment because it had no specialised feature identifying and limiting its use to the medical or scientific field and could be used for other purposes. The tribunal held that it was necessary to consider the state of the system at the time of the supply, to consider how it is used or operated and to decide whether, against that background, the system can be described as “medical or scientific equipment” giving the words their normal everyday meaning …
As I see it, the question which I have to ask myself is this: at the time of the supply (by all means bearing in mind what the supply was for), could these two-way mirrors sensibly be described as “medical goods”? Bearing in mind the dual test which is necessary, it seems to me that is it not possible to describe the windows as “medical goods”. They were goods, certainly, which were to be used for diagnosis and treatment, but they were not medical goods…”
10 	The tribunal was also taken to the decision in Clinical Computing Ltd. It has already noted that at that time the second of the tests was that of “sole use” and not merely “use”, although the issue was not in factual dispute in the case. Against that background the tribunal commented:
“The only guide to the construction of item 4(a) [now Note 3(a)] by the wording thereof is the indication that note all equipment “solely for use in medical research, diagnosis or treatment” is to be zero-rated on a supply thereof, but only such equipment as is also “medical or surgical [sic: this should read “scientific”] equipment”
In applying that test, the tribunal put some weight on the fact that the computers in question could be reprogrammed after the time of supply “to perform non-medical functions without any considerable change”.
11 	These authorities were considered recently by a tribunal in Supplier Ltd v Customs and Excise Commissioners (2002) VAT Decision 18247. Some of the items subject to consideration in that appeal were argued to be laboratory equipment. The tribunal commented:
“42	In considering whether protective gloves, footwear, face masks, suits and helmets are laboratory equipment we again apply the principle in David Lewis Centre which is that, in order to be identified as specified equipment, goods must have some specialised feature identifying and limiting their use to the specified field and should not be capable of being used for other purposes. It is necessary to consider the goods at the time of the supply and decide whether, against that background, the goods could be described as the specified equipment giving those words their normal everyday meaning.”
12	For the purposes of this case, the tribunal does not consider that it need do more than follow that approach when evaluating the equipment. It indicated at the oral hearing that it had some concerns about whether the tests in and after David Lewis Centre carried too much of the flavour of the “solely” test that was necessarily part of the thinking of the tribunal in Clinical Computing Ltd. But bearing in mind the facts of this case, and the extent of agreement between the parties about both the use of the goods and the purposes of  RE in using them, it does not arise for further consideration here. 
What is equipment? 
13	Before turning to the tribunal’s own findings and evaluation, it is useful to consider how the two parties themselves labelled and treated the Equipment.
14	The tribunal was shown the contract under which the contractor supplied the Equipment. The contract itself refers only to “the works”, and sets out, by way of a “brief description of the works” a 32-item bullet-marked list of goods and services to be provided. It is clear from the contract details and other evidence that some of the items could be purchased ready-made from suppliers but that other items were to be made for RE to specific individual designs. Further, as the design consultant confirmed in evidence and as the tribunal fully accepts, the assembly and installation of the various parts of the Equipment into a whole system was specifically designed for the particular laboratory complex and was emphatically not, in the consultant’s words, “a scissors and paste job”. It was rightly termed “bespoke”.  
15	The tribunal is enjoined to evaluate the Equipment not as listed in the contract but at the time of supply. It was common ground that the contract provided for supply in stages, but that it was appropriate to consider the time of supply as the time when the Equipment was installed and handed over, subject to any later adjustments under the contract. With that in mind, the tribunal consider that the parties were both correct in arguing the case on the basis that the Equipment should be viewed as a whole and not by reference to various constituent parts.    
16	Customs based their view of the Equipment, judged as a whole, on their published guidance 701/6, and the tribunal was shown the version of that guidance from September 2003 (although an earlier version would have been published at the time of supply). Part 4 of that guidance describes, under the heading “qualifying goods and services” the meaning of “relevant goods”. At paragraph 4.2.1 it answers the question “what is equipment?”:
“Equipment is articles designed or used for a specific purpose. It will usually be durable, although certain disposable items, such as syringes that are designed to be used once only, may still be equipment.” 
17	RE contended that the Equipment was “equipment”, although in evidence for RE the design consultant referred to the Equipment as “plant”. In answer to questions, the consultant categorised most of the installation that the consultant had overseen as plant and distinguished it from what, in the consultant’s view, was properly called the laboratory equipment. But it was accepted for Customs that this was not the phraseology of the legislation, and that the Equipment was “equipment” although, it was submitted, - but for a different reason to that of the consultant – not laboratory equipment. The tribunal agrees that it was equipment. 
18	In paragraph 4.2.8 the guidance answers the question “what is laboratory equipment?”:
“This includes equipment (see paragraph 4.2.1) that is designed for use in a laboratory, such as test tubes and other laboratory hardware; Bunsen burners; fume cupboards; microtomes; cryostats; laboratory benches; specialised sinks and catchpots.
The following are not laboratory equipment:
- ordinary cupboards, lockers, seats and other furniture, even when these are used to equip a laboratory;
- bulk materials …
- general purpose items used to equip a laboratory; and 
- consumables…”
19 	The tribunal emphasises that it does not sets out this notice because it has any force of law. It is of course only the view of one party, although as Neuberger J commented of another part of the notice in  Royal Midland Counties Home for Disabled People v Customs and Excise Commissioners [2002] STC 395 at 400 it is a “good working definition”. The tribunal quotes it because that is the basis on which Customs approached their decision. Indeed, in fairness, those acting for RE also deployed the wording of the notice at one stage, as the following passage in Customs’ decision letter indicates:
“You described the ventilation system as a “bespoke stand alone unit designed to conform to the strict standards required for laboratory and biomedical use” and that it should “qualify under the zero-rating provisions for laboratory equipment” much in the same way as “fume cupboards”, which are “specifically included within under the zero-rating provisions in HM Customs and Excise guidance”. However, as you are no doubt already aware “air conditioning units” are specifically excluded within the same provisions.”
… Laboratory equipment is defined as items designed with a specific purpose for use within a laboratory. A fume cupboard would fall within this description as it has the specific role of extracting dangerous gases during the course of a specific process. From examining the “description of the works” and the design criteria it is apparent that the new ventilation system although crucial to the work undertaken … is really no more than a very precise and advanced air-conditioning unit and would not therefore qualify for zero-rating.” 
20	After further correspondence, the review officer wrote to those advising RE with the following comment from Customs’ Policy Branch:
“They advised that after studying the material supplied, the new ventilation system is of a very high specification and will control the environment in which the research is being conducted but not in a way which would suggest it is a refrigeration or sterilising plant (both allowable in law). It appears to be much nearer in design to an air-conditioning unit.
It has been argued that the system is laboratory equipment in so much as it has characteristics akin to that of a fume cupboard. However, since the system will serve the main laboratory and other areas and staff will be working inside those areas it does not have the same function as a fume cupboard.” 
21	In the tribunal’s view, this suggests that Customs took their view by reference to their own guidance rather than the underlying statutory material. It agrees with those arguing for RE that Customs appeared at that stage to be as concerned in these letters with putting the equipment into the appropriate slot in the long list of items set out in paragraph 4.11 of Notice 710/6  (and described as “qualifying goods and services”) as in applying the statutory test. However, this approach was a direct response to the then arguments for RE. The approach taken for Customs in oral argument was, by contrast, fully based on the statutory language. At the same time, as the tribunal indicates below and was accepted for Customs at the hearing, Customs appear both to have made a mistake as to the facts and to have failed to note a critical aspect of the equipment functions when forming that view. When the tribunal pointed this out at the hearing, Customs invited the tribunal to take its own decision and it must now do so.
Was the Equipment laboratory equipment?
22	The tribunal agrees that the Equipment should be viewed as a whole and that it is not disputed that, when viewed that way, the Equipment as a whole is rightly described as “equipment”. Nor is its purpose in dispute. The tribunal does not therefore need to make or set out findings of fact about the purpose or purposes, and for the reasons in paragraph 1 it does not do so. Nor is it disputed that the Equipment as a whole could not properly be described as “medical”, “scientific”, “computer”, “video”, “sterilising” or “refrigeration” equipment – although parts of the equipment could be so categorised, and parts were directly connected to equipment that could be so categorised.  
 23	The tribunal is of the view that the officers acting for Customs erred in two ways in the decisions they took. First – as the review officer concerned fairly and, to the officer’s credit, openly accepted in evidence to the tribunal – Customs’ view was based on an assumption that the equipment served as an air conditioning unit to the whole of RE’s facilities at the relevant location, including corridors, offices and staff facilities. Had that been so, then the Commissioner’s decision would have had a much stronger factual basis that on the facts the tribunal finds. But the tribunal is satisfied that this is not so. The Equipment operates only in some 30% of the whole area. The area in which it operates is, essentially, constituted of a complex of laboratory rooms, many of them quite small, designed with a minimum of connecting corridors, and linked facilities such as rooms for staff to take on or off the specialised clothing worn by all staff and visitors both for their own safety and to protect the scientific integrity of experiments, and also security and control facilities. 
24	The Equipment is not a general air supply unit to the whole complex. It is far more specific than that. For example, the Equipment does not supply air to the main corridors. It appears that the officer was under the mistaken impression that it did supply those corridors because part of the ducting moving air between the laboratories and the outside runs over those corridors. In the tribunal’s view the fact that the Equipment links the laboratory rooms to the outside air across other rooms, and to that extent is outside the laboratories, does not as a matter of the common meaning of the term stop the Equipment being “laboratory equipment”. That consideration would, of course, apply to fume cupboard outlets.
25	Linked to that, the tribunal was also of the view that the fact that much of the functional part of the Equipment was located over the ceilings “in” individual laboratory rooms could also mislead. It places the “in” in inverted commas because the ceilings in many of the rooms were far removed from ordinary ceilings. For example, the equipment supplying air to some of the rooms was designed so that the air moved by what was referred to as a “piston effect”. Air was fed into the centre of the ceilings by large ducts and through large entry filters specifically designed to ensure the inward airflow did not create any draughts. This was despite the fact that the rate of change of the air in the rooms was many times that of a normal air conditioning unit. It was then removed from these rooms by a double series of stainless steel vents, incorporating filters, running along both sides of the ceiling. These was designed specifically to remove the air only from those parts of the room, and again to do so without causing draughts, but also to do so in a way that allowed not only high precision filtering of the outgoing air but also so that the filters and vents could be sterilised with minimum handling of equipment. At the same time, the airflow was also designed to create invisible “walls” of air within the rooms. In one room visited by the tribunal the result was such that, from an atmospheric point of view, the room was effectively divided into three zones with no visible barriers to assist in the division. In effect, the only purpose of the ceiling positioned between and supporting the inward vents and the outward vents was to further help stop unwanted air  movement. The tribunal also inspected the roof area and saw for itself that the ceilings had no weight-bearing purpose and that there was nothing above a ceiling save for the Equipment and other supply equipment and the roof. What was above the ceiling was as much part of the laboratory was what was below. The tribunal also noted than in such rooms there were no windows and that the doors were also designed to prevent airflow. The tribunal also saw other specialised rooms with other specialised airflow and pressure arrangements.    
26	The other mistake made by the officer and, in the tribunal’s view, also Customs, was in taking too limited a view of the full functioning of the Equipment both in these rooms and in other rooms supplied by the Equipment. The review officer stated in evidence about the basis of the decision that the Equipment controlled the temperature and humidity of the air in the rooms and was therefore air conditioning. In the tribunal’s view this is a major understatement of the function performed by the Equipment. It was far more elaborate and specific than that. Again, the tribunal saw this for itself on inspection. The officer creditably accepted that no account was taken in viewing the system of the fact that air pressure could be controlled in addition to temperature and humidity. Nor was attention paid to the highly directional nature of the airflows created in some places by the Equipment that assisted the atmospheric control. But control of the air pressure was a central part of the functioning of the equipment for two entirely separate reasons.   
27	As a generalisation, air in any room will have three variables of importance in a scientific experiment in which air is a factor: its temperature, its humidity and its pressure. And, of course, the air is a factor in relation to any experiment involving breathing organisms whether living in the air, living in water, or living in subterranean conditions. RE’s evidence emphasised that it was concerned to standardise all those variables so far as possible for the purposes of its own experiments. Only if it could standardise and measure these variables, and thereby eliminate or control them from or within its experiments, could it produce scientific results of the quality it sought. 
28	RE was also concerned to replicate experiments carried out in other laboratories, some of them in areas of the world of sharply different climate to the United Kingdom. It therefore needed for those reasons also to have precise control over not only temperature and humidity but also pressure. The tribunal was particularly impressed by the very precise control over those variables given by the Equipment – control that, linked with other equipment, went way beyond anything that could be described simply as “air conditioning”. It noted time and again during its inspection the presence of gauges in individual parts of laboratories giving readings of temperature, humidity and pressure. And it was particularly impressed by the fact that those temperatures, humidities and even pressures could vary within a single laboratory room because of the pressure barriers created within the laboratories by the airflow patterns and other aspects of the Equipment. In other parts of the complex visited by the tribunal that effect was created or enhanced by specific connections between individual items of laboratory equipment and the Equipment. It was also shown detailed records maintained on a continuing basis of each of the variables of temperature, humidity and pressure, and the extent to which the equipment could neutralise within the laboratories changes to the outside atmosphere (for example, it could react to the changes not only in humidity but also temperature and pressure when it started to rain). 
29	Separately from that aspect of the control given by the Equipment was the safety aspect. In some ways, following the earlier argument for RE, it is not too far fetched to argue that the Equipment to some extent turned the entire area of the laboratories served into a whole series of giant fume cupboards. (The tribunal does not share the apparent view of Customs that something is only a fume cupboard if individuals cannot not enter it, though perhaps fume chamber would be a better term).  It is necessary for a variety of reasons – including Government legislative requirements and behind those requirements the health and safety of those who work within the laboratories, the health and safety of the subjects of the experiments and the health and safety of the community in general – to ensure minimum unintended airflow within individual laboratory rooms as well as more generally between parts of the laboratory complex and to and from the outside air. And it is necessary to filter the air leaving the Equipment to the outside air to very high standards. Part of the mechanism for controlling the airflows to ensure both internal and external integrity is provided by the Equipment. It allows quite precise differential pressures between different areas of the complex so that air cannot escape in unintended directions. For example, the pressure in a laboratory can be below the pressure in the corridor giving access to the laboratory. Indeed the Equipment is so designed that, in conjunction with other laboratory equipment, it can ensure that the pressure in and airflow through an individual cage is such that air flows one way into the cage and another way out. 
30	The tribunal therefore takes the view that the decision of Customs cannot be sustained on the basis on which it was made. It was nonetheless urged by Customs to reach the same conclusion on the basis that when properly considered the Equipment was not equipment of a kind designed only for a laboratory and that similar equipment could be used elsewhere, for example in hospitals or in the manufacture of clinical drugs or computer parts.  The tribunal accepts that this is relevant to its considerations. 
31	The tribunal is of the view that the supply of equipment that is the subject of this case is properly categorised as a matter of fact as “laboratory equipment” in the ordinary meaning of those terms. What the tribunal saw and heard convinced it that the way in which the Equipment works is very much part of the control context provided by RE’s laboratories within which its experimenters operate.  While the tribunal accepts RE’s arguments of the dangers of categorising, it would express its view that what it saw was more “fume cupboard” than “air conditioning unit”; or to use other illustrations deployed in argument, more “Bunsen burner” than “air heater” or “laboratory bench” than “ordinary furniture”.
32	In taking this view the tribunal emphasises that it is not attempting in any way to do more than apply what it understands from its review of the authorities above to be the ordinary meaning of “laboratory equipment” to equipment that in this case is highly specific to its intended purposes and location. In this, it takes its lead from the well known views of Lord Reid in Cozens v Brutus [1973] AC at 861: “the meaning of an ordinary word of the English language is not a question of law.” It also finds as fact that the Equipment is far from the kind of equipment on which the tribunal commented in Clinical Computing Ltd and again in Supplier Ltd as being potentially multipurpose. As supplied, the Equipment as a whole was designed as equipment for laboratories and had no clear alternative use. It is irrelevant to that finding that parts of the Equipment could by themselves be so used. Beyond that, the tribunal resists the temptation of elaborating any further any definition of “laboratory equipment.” 
33	In the particular context in which the tribunal viewed the Equipment as a whole and noting the purposes for which the Equipment is used, it is the tribunal’s view that the Equipment does far more – and at the same time also less – than would be done by an air conditioning unit. It also serves to enable various statutory tests to be met or staff, subject or community health and safety to be protected. But behind both these functions, its key feature is that it allows scientific experiments to take place under laboratory conditions controlled to the highest practicable levels. 
34	The tribunal’s understanding of the practical function of a laboratory for medical research is that it provides both a safe and healthy context for everyone and everything involved in the experiments and also a context that allows the science to be carried out in as controlled a manner as the experiment warrants. Without going into any detail, it is fair to comment that RE’s laboratory is clearly working at the forefront of its scientific field internationally, conducting experiments involving at times very close attention to detail and at times very high risks. It is relevant to mention risk because a scientific research experiment is by its very nature something with an unknown outcome. While the result will probably have been predicted, it is uncertain. If the outcome is known, then the work is not research. That is what distinguishes it from, for example, the production of computer parts or the process of medical diagnosis or treatment. A laboratory and its equipment have to be designed therefore both to maximise control over the known factors of relevance to an experiment and also with the possibility of unknown outcomes in mind. That is true of the Equipment installed for RE in this case. It is not true of an air conditioning unit. In RE’s case, the equipment it uses has to be good enough to sustain its research work at the highest level, and it is. This equipment as a whole clearly is not intended for, and could not as a matter of fact be used for, any other purpose and the tribunal can see no other purpose for which a similar unit would be installed by anyone.
35	Therefore, on these unusual and very specific facts, the tribunal allows the appeal.    
36	It is not therefore necessary for the tribunal to consider RE’s second argument, or what the tribunal understands by “accessory”. It would comment only that if it had been necessary to consider secondary arguments it would have wished also to explore with the parties the fact that, were the Equipment to be viewed for its parts rather than the whole, then some parts would appear to fit readily within paragraph (a) and others equally readily within paragraph (c).
37	The tribunal adds the final comment that it does not regard this decision as a precedent for any other taxable person. It is a decision on the facts. For the reasons stated at the beginning of its decision, the tribunal has deliberately omitted from this decision details of the specific uses to which the laboratories were put. That is not to be taken as meaning that the tribunal ignored those issues. Far from it. However, as the purposes to which the laboratories and the equipment were put were not in dispute the tribunal did not need to review that evidence in the decision.  
38	RE is entitled to costs, to be taxed in the usual way.  

DAVID WILLIAMS
CHAIRMAN
RELEASE DATE: 19 May 2005

LON/03/0931