Changes to the VAT rules for energy-saving materials are expected to have a negligible impact on the Exchequer and on the administrative burdens on businesses. Around 1,500 future installations of solar panels, energy-saving boilers and wind turbines are expected to be affected annually, plus some other smaller scale items. This represents less than 5 per cent of the value of all installations currently eligible for the reduced rated. The remaining 95% remains unaffected.
For installations affected by the changes, the goods element of the installations will become standard rated with the labour element continuing to benefit from the reduced rate.