Value Added Tax

Liability ― energy-saving materials

Produced by Tolley
  • 09 May 2022 15:28

The following Value Added Tax guidance note Produced by Tolley provides comprehensive and up to date tax information covering:

  • Liability ― energy-saving materials
  • Energy-saving materials
  • What is residential accommodation?
  • What energy-saving materials are included?
  • Damp proofing
  • What constitutes ‘installation’?
  • Installing energy-saving materials with ancillary supplies
  • Installing energy-saving materials with other goods and services
  • Mixed supplies
  • Reduced rate ― energy-saving materials in Northern Ireland
  • More...

Liability ― energy-saving materials

Businesses involved with advising contractors or subcontractors installing energy-saving materials, grant-funded heating equipment or security goods will find this guidance note of particular interest as it outlines the main rules regarding the liability of the supply of installed qualifying goods and grant-funded installations of heating equipment.

For in-depth commentary on the legislation and case law surrounding the liability of energy-saving materials, see De Voil Indirect Tax Service V4.294.

Energy-saving materials

The zero-rate applies to certain supplies of energy-saving materials installed in England, Wales and Scotland where the installation takes place between 1 April 2022 to 31 March 2027. For installations of qualifying materials before and after this date, or where the supply of installation takes place in Northern Ireland, qualifying supplies of energy-saving materials will be subject to the reduced rate (see below).

In order to determine if the zero-rate will apply, the following questions need to be considered:

  1. will the materials be installed in residential accommodation in England, Wales or Scotland?

  2. do the materials to be installed qualify for zero-rating?

  3. are the materials installed by the person supplying the energy-saving materials?

VENSAV3000; VATA 1994, Sch 8, Group 23, Notes 1–3

Note that if these items are installed in a new dwelling, the installed materials will most likely be zero-rated as part of a new construction of a zero-rated dwelling. See the Construction ― zero-rating of construction services and Buildings and construction ― building materials guidance notes.

What is residential accommodation?

Residential accommodation is defined as either:

  1. a building, or part of a

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