VAT: Energy

Treasury written question – answered on 25th March 2020.

Alert me about debates like this

Photo of Alex Cunningham Alex Cunningham Labour, Stockton North

To ask the Chancellor of the Exchequer, what assessment his Department has made of the potential effect of removing VAT on energy efficiency products on encouraging the take up of those products.

Photo of Jesse Norman Jesse Norman The Financial Secretary to the Treasury

Although the standard rate of VAT of 20% applies on energy saving materials, the Government allows a reduced rate of 5% of VAT on:

- all installations of energy saving materials for recipients who are aged 60 or over or on certain benefits, for housing associations, and where the installations are in buildings used for relevant residential purposes, and;

- on all other installations of energy saving materials in residential accommodation where the cost of the materials does not exceed 60% of the total cost of the installation.

It should be noted that if the value of the energy-saving materials exceeds 60%, then only the labour cost element will qualify for the reduced rate (with the supply of the materials being taxed at the standard rate).

Does this answer the above question?

Yes1 person thinks so

No0 people think not

Would you like to ask a question like this yourself? Use our Freedom of Information site.