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Tax Tip

VAT Clarification on Energy saving Materials 14/11/11

The main body for representing plumbing and heating businesses in the UK, the Plumbing & Heating Contractors’ Alliance (PHCA) has successfully lobbied the Government for a revision of its guidance on VAT in relation to energy saving materials.

HMRC has now produced further guidance about the application of VAT on energy saving materials. Notice 708/6 – November 2011 seeks to clarify a number of issues relating to VAT, with the main point of interest for plumbing and heating engineers being the guidelines in section 2.3, which give more specific advice on the VAT rate to be applied to energy saving materials installed with other works.

John Thompson, Chief Executive of PHCA said: “We are pleased that our dialogue with HMRC has been productive. These updated guidelines mirror the advice HMRC provided in a letter to us in response to our enquiries.”


Tonmoy Kumar, Manager of the Accounts Department of ABDS says:
 

“A policy change is needed to allow the lower rate of VAT on all home improvement to work as a stimulus to the plumbing and heating sector which has been hit hard in the recession. A policy change in this area would also address the complexities of VAT application on energy saving materials. ”
 

If you need any help and advice with your Tax compliance, contact Lavinia Newman, Stuart Coleman or Tonmoy Kumar to discuss how ABDS can help in all your financial planning and business advice.

ABDS Chartered Certified Accountants of Southampton.
Tel: 023 8083 6900  E-mail: abds@netaccountants.net

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