Reduce VAT to 5% on all energy efficient materials and their installation

26th Mar 2015

 

As the election approaches and politicians argue over the rate of VAT, the Energy and Utilities Alliance, EUA is calling on all political parties to set VAT at 5 per cent for all energy efficiency materials.

Mike Foster, Chief Executive of EUA said “Successive Governments promote energy efficiency measures, encouraging homeowners to install everything from insulation, new boilers to state-of-the-art controls yet there are huge anomalies in the levels of VAT charged.

Installing a new control, as a one-off job, would attract VAT at the lower rate of 5 per cent, making it attractive to the consumer yet installing the same control, as part of a wider system improvement, would attract VAT at the standard, 20 per cent rate. The current system is inconsistent and sends out mixed messages to consumers and it needs clarification.

Green Deal, ECO and other energy efficiency policies have failed to deliver, simplifying the VAT rules around products and their installation is something that could be done reasonably easily, it would provide real help to hard-pressed consumers.