Revenue and Customs Brief 13 (2015): reduced rate of VAT for the installation of energy saving materials
Updated 18 August 2015
© Crown copyright 2015
This publication is licensed under the terms of the Open Government Licence v3.0 except where otherwise stated. To view this licence, visit nationalarchives.gov.uk/doc/open-government-licence/version/3 or write to the Information Policy Team, The National Archives, Kew, London TW9 4DU, or email: psi@nationalarchives.gov.uk.
Where we have identified any third party copyright information you will need to obtain permission from the copyright holders concerned.
This publication is available at https://www.gov.uk/government/publications/revenue-and-customs-brief-13-2015-reduced-rate-of-vat-for-the-installation-of-energy-saving-materials/revenue-and-customs-brief-13-2015-reduced-rate-of-vat-for-the-installation-of-energy-saving-materials
Purpose
The purpose of this brief is to explain the government’s plans in respect of the decision of the European Court.
Who should read this?
This brief should be read by anyone who installs energy saving materials.
Background
In 2012, the European Commission commenced infraction proceedings against the UK claiming that its application of the reduced rate for the installation of energy saving materials was not in accordance with EU law.
The European Court published its decision on 4 June 2015. The court agreed with the Commission that the UK had implemented the relief in a way that was not in accordance with EU law.
In essence, the court found that the UK had applied the reduced rate too widely. The reduced rate should be introduced as part of a social policy and should be targeted to those whom the policy is designed to help. A social policy cannot apply equally to everyone. In addition, the supplies must amount to a renovation or alteration of housing to be consistent with EU law potentially casting doubt on some of the installed goods currently subject to VAT relief.
Current position
The government is currently considering the implications of the decision.
If there are to be any legislative changes, they won’t be implemented before Finance Act 2016. Until then, supplies of the installation of energy savings materials will continue to be reduced rated and any changes will only apply to future supplies and not to supplies already made.
Who can I contact for further information?
For further information please contact the VAT Helpline on Telephone: 0300 200 3700.
The VAT Helpline is available Monday to Friday, 8am to 6pm.
If you have hearing difficulties, please dial the Textphone service on Telephone: 0300 200 3719.