HMRC has updated its guidance to clarify the application of the zero, reduced and standard rates of VAT for the installation of energy-saving materials in GB and NI following recent legislative changes. VAT Notice 708/6: Energy-saving materials and heating equipment covers the following Spring Statement changes to VATA 1994, as introduced by the Value Added Tax (Installation of Energy-Saving Materials) Order, SI 2022/361:
Great Britain: The new rules from 1 April 2022 remove both the social conditions test and the 60% test for all installations of qualifying energy-saving materials in England, Scotland and Wales. Wind and water turbines are also included in the list of energy-saving materials. The rules also introduce a temporary zero rate on all installations of qualifying energy-saving materials that are made on or after 1 April 2022 up to and including 31 March 2027. On 1 April 2027 the installation of qualifying energy-saving materials in Great Britain will revert to the reduced rate of 5%.
Northern Ireland: Northern Ireland remains broadly subject to the EU’s VAT rules in respect of goods (as a consequence of the Northern Ireland Protocol) meaning that the list of qualifying goods and rate of VAT due on installations remains unchanged.
HMRC has updated its guidance to clarify the application of the zero, reduced and standard rates of VAT for the installation of energy-saving materials in GB and NI following recent legislative changes. VAT Notice 708/6: Energy-saving materials and heating equipment covers the following Spring Statement changes to VATA 1994, as introduced by the Value Added Tax (Installation of Energy-Saving Materials) Order, SI 2022/361:
Great Britain: The new rules from 1 April 2022 remove both the social conditions test and the 60% test for all installations of qualifying energy-saving materials in England, Scotland and Wales. Wind and water turbines are also included in the list of energy-saving materials. The rules also introduce a temporary zero rate on all installations of qualifying energy-saving materials that are made on or after 1 April 2022 up to and including 31 March 2027. On 1 April 2027 the installation of qualifying energy-saving materials in Great Britain will revert to the reduced rate of 5%.
Northern Ireland: Northern Ireland remains broadly subject to the EU’s VAT rules in respect of goods (as a consequence of the Northern Ireland Protocol) meaning that the list of qualifying goods and rate of VAT due on installations remains unchanged.
