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Where Taxpayers and Advisers Meet

5%VAT conservatory Roofs/conversions

Linzi218
Posts: 7
Joined: Fri Dec 21, 2018 6:25 pm

5%VAT conservatory Roofs/conversions

Postby Linzi218 » Wed May 15, 2019 7:43 pm

Hi all

Wondering if you could shed some light I have been asked to help a business with bookkeeping they currently convert conservatory roofs to new lightweight roofing systems and also complete conservatory renovations.they want to charge 5% vat as they are near reaching the vat threshold.

However my query is if the 5% vat applies to sales due to the energy efficiency regulations? I don't want to start helping with bookkeeping without the correct information as I am unsure about the 5% vat regulations for energy efficiency. As always the vat notices are unclear.

Any help would be appreciated.

robbob
Posts: 2842
Joined: Wed Aug 06, 2008 4:01 pm

Re: 5%VAT conservatory Roofs/conversions

Postby robbob » Thu May 16, 2019 8:08 am

Hello Linzi

Notice 708/6 is probably the best starting point - specifically section 2.3.3 as you say energy saving materials.

I wouldn't worry about knowing the full chapter and verse in this regard as there can be any number of reasons why reduced rate may apply. Personally i would always ask anyone the reasons why they think something is reduced rated and ask for a copy of the relevant advise they have confirming that fact - that's the best way of covering a scenario where its covered by something you may not be aware of without looking silly - its difficult to find the stuff you don't know exists!

Other reasons i can think of would be empty homes / new builds or conversions eligible to 5% - thats all covered by notice 708
https://www.gov.uk/government/publications/vat-notice-708-buildings-and-construction/vat-notice-708-buildings-and-construction

Unless the items are specifically energy saving products (insulation is only obvious one i can think of here) being billed as separate installation i am a bit dubious as to whether 5% would normally apply here so i understand your hesitancy - who knows though perhaps there is something i am not aware of in that regard.

Trevor S
Posts: 34
Joined: Tue Jan 01, 2019 12:37 am

Re: 5%VAT conservatory Roofs/conversions

Postby Trevor S » Thu May 16, 2019 11:25 pm

The legislation is http://www.legislation.gov.uk/ukpga/1994/23/schedule/7A, groups 2 and 7. This leads to much the same conclusion as the notices already referred to.

davebrownvat
Posts: 57
Joined: Mon Jul 20, 2009 4:37 pm

Re: 5%VAT conservatory Roofs/conversions

Postby davebrownvat » Sun Jun 23, 2019 9:44 am

There's been a recent Tax Tribunal case on this topic - WETHERALDS CONSTRUCTION LTD - appears to be an identical subject matter, but check out the case first, to see if the fine detail is the same. I've just been on the BAIILI website and found it.

www.bailii.org/uk/cases/UKFTT/TC/2016/TC05552.html

les35
Posts: 566
Joined: Wed Aug 06, 2008 3:09 pm

Re: 5%VAT conservatory Roofs/conversions

Postby les35 » Tue Jun 25, 2019 5:27 pm

This issue has been in the press recently, as such installations will generally revert to 20% from 1 October 2019.

Linzi218
Posts: 7
Joined: Fri Dec 21, 2018 6:25 pm

Re: 5%VAT conservatory Roofs/conversions

Postby Linzi218 » Tue Jun 25, 2019 6:40 pm

Les 35 can you point me in the direction of the article you have seen regarding the 20% change to so I can take it to the employer please. Evidence always helps when making the case.

I appreciate all the comments.

davebrownvat
Posts: 57
Joined: Mon Jul 20, 2009 4:37 pm

Re: 5%VAT conservatory Roofs/conversions

Postby davebrownvat » Thu Jul 04, 2019 8:25 am

As far as I can establish, it only becomes 20% instead of 5%, where the value of the materials is more than 60% of the entire installation. The following link might help on the proposals.


https://assets.publishing.service.gov.uk/government/uploads/system/uploads/attachment_data/file/791587/Draft_TIIN_VAT_changes_to_the_reduced_rate_for_energy-saving_materials.pdf

Linzi218
Posts: 7
Joined: Fri Dec 21, 2018 6:25 pm

Re: 5%VAT conservatory Roofs/conversions

Postby Linzi218 » Thu Jul 04, 2019 12:34 pm

As far as I can establish, it only becomes 20% instead of 5%, where the value of the materials is more than 60% of the entire installation. The following link might help on the proposals.


https://assets.publishing.service.gov.uk/government/uploads/system/uploads/attachment_data/file/791587/Draft_TIIN_VAT_changes_to_the_reduced_rate_for_energy-saving_materials.pdf
Hi I have had a read through this it doesn't make sense as it said if the cost of ESM is more than 60% the labour will only be 5% you would think the ESM would remain at reduced and all other materials would be 20% if that cost was more than 60% of total cost?

Any insight?

kingmaker
Posts: 8
Joined: Tue Feb 11, 2014 3:14 am

Re: 5%VAT conservatory Roofs/conversions

Postby kingmaker » Tue Jul 09, 2019 5:01 pm

I would look into the Group 2 and Group 3 of Sch 7A.

also look at this link:

https://www.vatforum.co.uk/post/5-vat-supplies-of-insulation-for-roofs-10143698?pid=1308994387
I'm looking for VAT advisory work & subcontracting work from accountants

Trevor S
Posts: 34
Joined: Tue Jan 01, 2019 12:37 am

Re: 5%VAT conservatory Roofs/conversions

Postby Trevor S » Wed Jul 10, 2019 1:05 pm

A final version of the HMRC document has now been produced, this includes details of a named contact in HMRC:

https://www.gov.uk/government/publications/vat-changes-to-the-reduced-rate-for-energy-saving-materials-2019/vat-changes-to-the-reduced-rate-for-energy-saving-materials-2019


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