What rate of VAT is charged or what rate do I pay for exterior wall insulation work 5%
If you are having exterior wall insulation work installed on your house the current VAT rate you should be charged is 5%
What is the reduced rate of VAT for energy saving materials?
If a contractor charges you more than this you paying 12.5% too much & in January 2011 you would be paying 15% more than you should do.
VAT rate for energy saving materials Simplified by Wall2Wall Solutions
Follow this link to get it official HM CUSTOMS AND EXCISE
What is the reduced rate of VAT for energy saving materials?
Taken from Notice 700 the VAT extract from 3.3 page 22 of HM Customs & Excise Notice 708/6
Energy-saving materials
August 2006
There are three rates of VAT:
· A standard rate, currently 17.5%;
· A reduced rate, currently 5%; and
· A zero rate.
2.5 What energy-saving materials are covered by the reduced rate?
The reduced rate applies to installations of:
- central heating and hot water system controls (see paragraph 2.6);
- draught stripping (see paragraph 2.7);
- insulation (see paragraph 2.8);
- solar panels (see paragraph 2.9);
- wind turbines (see paragraph 2.10);
- water turbines (see paragraph 2.11);
- ground source heat pumps (see paragraph 2.2.7);
- air source heat pumps (see paragraph 2.2.8);
- micro combined heat and power units (see paragraph 2.2.9); and
- wood-fuelled boilers (see paragraph 2.2.10)
Insulation means materials that are designed and installed because of their insulating qualities.
The reduced rate applies to installations of insulation for:
- walls;
- floors;
- ceilings;
- roofs or lofts; and
- Water tanks, pipes or other plumbing fittings.
The reduced rate does not apply to essentially decorative products such as curtains and carpets
2.2 Installation
Installation, in this context, means putting in place energy-saving materials.
This involves some process, by which materials are permanently fixed in place,
although loft insulation may simply need to be unrolled and positioned in place to be
installed.
2.3 Incidental work
Any work that you undertake as part of the installation process is eligible for the
reduced rate.
This includes minor building works, such as planing doors or windows, enlarging loft
hatches, and painting or plastering to make good.
But if the installation of energy-saving materials is incidental to another supply you
are making – such as the building of an extension or the replacement of a roof – you
are making a single supply of construction services (see Notice 708 Buildings and
construction).
2.4 New dwellings
If you install energy-saving materials during the course of construction of a new
dwelling, your supply is zero-rated. If you are involved in the construction of new
dwellings you should consult Notice 708 Buildings and construction.
2.16 What is residential accommodation?
The installation of energy-saving materials is only reduced-rated if they are for use in
the following types of residential accommodation:
houses, flats or other dwellings;
armed forces residential accommodation;
children’s homes;
homes providing care for the elderly, disabled people, or people
who suffer or have suffered from drug or alcohol dependency or
mental disorder;
hospices;
institutions that are the sole or main residence of at least 90% of
their residents;
monasteries, nunneries and similar religious communities;
school and university residential accommodation for students
and pupils;
self catering holiday accommodation;
caravans that are sited on permanent residential caravan parks.
They must be either longer than 7 metres or wider than 2.3
metres, excluding towing bars and similar apparatus used solely
for the purpose of attaching the caravan to a vehicle; and
Notice 708/6 Energy-saving materials
August 2006
Page 7 of 12
houseboats that are designed or adapted for permanent
habitation and have no means of self propulsion, or other boats
which are used as a person’s sole or main residence, such as
canal boats and Dutch barges, on which the boat owner pays
Council Tax or domestic rates.
See