Energy: VAT

(asked on 17th October 2019) - View Source

Question to the HM Treasury:

To ask the Chancellor of the Exchequer, if he will extend the eligibility for the reduced rate of VAT for energy-saving materials to (a) charities, (b) community groups, (c) public bodies and (d) social enterprises.


Answered by
Jesse Norman Portrait
Jesse Norman
This question was answered on 25th October 2019

In 2015 a Court of Justice of the European Union decision said that the scope of the UK’s VAT relief on energy saving materials was too wide.

Following discussions with the European Commission, the Government has maintained the reduced rate of VAT for certain energy saving materials for people who are aged 60 or over or in receipt of certain benefits, and for housing associations or certain residential buildings, such as children’s homes or care homes.

In all other cases, the reduced rate will still apply unless the value of the materials exceeds 60% of the total cost of installation. In such cases the reduced rate will apply to the labour costs of installation.

There may be flexibility to amend VAT rules in the future, but while the UK is a member of the EU it is required to comply with EU VAT rules.

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