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Where Taxpayers and Advisers Meet

VAT on energy saving materials

lenskie12
Posts:2
Joined:Thu Apr 19, 2018 11:57 am
VAT on energy saving materials

Postby lenskie12 » Thu Apr 19, 2018 12:20 pm

Hi All,

I'm new to boiler and heating installation business and having a hard with dealing with the VAT. I hope someone help me interpret and enlighten me about VAT Notice 708/6: energy-saving materials.

As per VAT Notice 708/6, I can charge a reduced rate VAT of 5% for the installation of energy saving materials. Does this include the whole cost of the job, labour and materials? When I asked an advice from an accountant, he told me that essentially, I can use the reduced rate (5%) for the labour for installing the energy saving controls. Does this mean I have to raise 2 invoices separating the 5% for labor and 20% for the materials cost? Because the way I interpret the rules, I can only charge 5% VAT to the job if it qualifies for the reduced rate and 20% for the whole job if it's not.

Thanks in advance.

lenskie12
Posts:2
Joined:Thu Apr 19, 2018 11:57 am

Re: VAT on energy saving materials

Postby lenskie12 » Thu Apr 19, 2018 2:36 pm

*having a hard time

les35
Posts:635
Joined:Wed Aug 06, 2008 3:09 pm

Re: VAT on energy saving materials

Postby les35 » Fri Apr 20, 2018 8:15 am

The reduced rate applies to the INSTALLATION of energy saving materials. That includes parts and labour, as long as the goods are eligible. So you do NOT need to split the invoice between parts at 5% and labour at 20%.

davebrownvat
Posts:60
Joined:Mon Jul 20, 2009 4:37 pm

Re: VAT on energy saving materials

Postby davebrownvat » Fri Apr 27, 2018 1:17 pm

But beware - if you are installing a new boiler, including controls, HMRC are likely to take the view that the controls are an integral part of the installation and therefore do not qualify at 5% VAT. VAT Notice 708/6, paragraph 2.3.3 refers.


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