The appellant hired plant and machinery. HMRC argued that the appellant’s supply of red diesel fuel formed part of its main supply of plant hire, as a single, composite supply, and therefore required to follow the VAT liability of the supply of plant hire, which was a single standard-rated supply of services.  

The appellant’s primary argument in this case was that its supplies of plant hire and its supplies of red diesel fuel constituted multiple supplies for VAT purposes and that these multiple supplies should be afforded their own VAT treatment. Accordingly, the appellant contended that its supplies of plant hire should be standard-rated, and its supplies of fuel should be at the reduced rate because the quantity of the supplies fell below the de minimis threshold set out in VATA 1994, Sch 7A, Group 1, Item 1, Note 5(c). 

The appellant supplies plant and machinery with a full tank of fuel. As part of the contractual terms,