Energy-saving materials: meaning of ‘installation’
Installation, in the context of VAT Act 1994, Schedule 7A, Group 2, means putting in place energy-saving materials. We accept that in certain circumstances traders commissioning the installation of energy saving materials may not physically be involved in all stages of the installation process themselves, but still benefit from the reduced rate.
For example, we allowed the reduced rate for a company commissioning the installation of a ground source heat pump on a building site, although they were not responsible for the main installation works. Although the contractors who carried out the main installation works were not supplying their services to the commissioning company, they were nevertheless working directly to their specifications and instructions effectively acting as their agents in the installation of the pump - it was only the existing presence of these contractors on the building site that resulted in the company not engaging contractors of its own to carry out the installation.
It was clear that the commissioning company’s role went way beyond that of a builders’ merchant who would normally supply goods only or supply and deliver goods to a site. The company checked and initiated the system, carrying out any remedial work that might be required. These activities could be regarded as the final part of the installation process, as without them the pump would not work.