Calls for VAT reduction on Retro Fit Insulation for UK Homes
Construction businesses, as well as our Housing Association network, seem to be increasingly busy with Retro Fit projects for housing insulation – a lot of which is supported by government funding. It was interesting to see this press note in the energy industry news. It reflects the VAT complexities around the area of supply and installation of energy saving materials against both the Net Carbon agenda but also puts the issue into the political context with its call for VAT rates to be reduced on energy improvement works to benefit households struggling as energy prices rise.
Here at Centurion we are closely involved in the VAT issues that affect these Retro Fit projects and would encourage development teams and project managers in housing associations in particular to be aware of making too great an assumption that the VAT rate of 5% will apply. That may well be the case on narrowly scoped energy-saving refit projects but all too often these projects encompass a range of works not just the specifics of supply and installation of the required energy saving materials themselves. Grants for housing associations to go out and simply buy the energy saving materials they themselves will install will attract the 20% VAT rate for example.
We are having on-going discussions with HMRC on the VAT issues around these projects. Perhaps industry lobbying for a zero VAT rate across a wider application will bear fruit but until that point we’d encourage our clients to work through the VAT costs thoroughly when bidding for grant funds from government bodies to ensure the VAT impact on such budgets is fully understood – by both the funder and the recipient.
Centurion VAT – here for when VAT gets complicated - firstname.lastname@example.org or get in touch with your usual Centurion VAT contact.
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