VAT Change Insulation Material & Listed Buildings

Tŷ-Mawr ‌‌ posted this on 22 Oct 2016

From the 1st April 2022, the VAT rate on Energy Saving Materials will change.

The 5% rate applied to the installation of certain energy materials in certain circumstances and/or to certain people will be reduced to 0%.

This change does not impact us at Ty Mawr as we only supply materials and so we ALWAYS have to charge 20% VAT.

However, if a contractor purchases materials from us and they are VAT registered then they are able to claim the VAT back on their own VAT Return.

When the contractor then charges the owners of the property, they will charge for labour and materials (the goods they purchased from us) and this is when they charge the whole supply at 0%, therefore the end customer benefits the reduced rate of VAT.

Please note we are not qualified to comment on this or any other VAT matter but are able to refer clients to read HMRC notice 708 section 11.1 – Goods supplied over the counter – which is the rule that we have to follow and also 11.2 - Goods incorporated by a builder - which is the rules that affect the contractor and shows they are allowed to reduce rate any materials they supply with any labour charge they were allowed to reduce rate.

Please check all information with your own accountant before basing any decisions on this.