Industry calls for VAT reduction on all energy efficient materials and their installation

Published:  30 March, 2015

As the election approaches and politicians debate over the rate of VAT, the Energy & Utilities Alliance (EUA) is calling on all political parties to set VAT at 5% 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 and 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%, 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% rate. The current system is inconsistent and sends out mixed messages to consumers and it needs clarification,” he added.

“Simplifying the VAT rules around products and their installation is something that could be done reasonably easily, and would provide real help to hard-pressed consumers.”