Are you a builder, plumber, renewables engineer or gas engineer or another installer of energy saving materials? This article will help you understand the basics of how the reduced rate of VAT could apply to you, your business and your customers!
Many people aren’t aware that if they are installing energy-saving materials they may be reduced-rated for VAT purposes, even if the installation is granted funded! However, this tax saving rule only applies to installations, not supply- you must be putting in place energy-saving materials, usually by the means of permanently fixing them, (although loft installation can just be unrolled and positioned and still be considered installed) to charge the reduced rate. If you’re only supplying the products, then they are charged at standard rate. The installation must be in, or in the curtilage of, residential accommodation, for example:
- houses, blocks of flats or other dwellings
- armed forces residential accommodation
- children’s homes
- homes providing care for the elderly, disabled people, or people who suffer or have suffered from drug or alcohol dependency or mental disorder
- institutions that are the sole or main residence of at least 90% of their residents;
- monasteries, nunneries and similar religious communities
- residential accommodation for students or pupils
- self-catering holiday accommodation
- caravans used as a place of permanent habitation (such as a park home or static caravans sited on a permanent residential caravan park)
- houseboats that are designed or adapted for permanent habitation and have no means of self-propulsion, or other boats which are used as a person’s sole or main residence, such as canal boats and Dutch barges, on which the boat owner pays Council Tax or domestic rates
The reduced rate does not apply to the installation of energy-saving materials in hospitals, prisons or similar institutions, hotels or inns or similar establishments.
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