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Increase VAT on energy saving measures

Date: 02 May 2013
THE RECENT BUDGET CONFIRMED that the government will be ending the reduce rate of VAT applied to energy saving materials installed in buildings used solely for relevant charitable purposes. The increase will come into effect from 1st August 2013 meaning charities will have to pay an additional 15% in VAT for these energy saving measures.
With the increase only a few months away, we are advising any parishes to prioritise the installation of these energy saving measures within the next 3 months in order to benefit from the reduce VAT rate. The energy saving measures that can benefit from a lower VAT rate before 1st August 2013 are:
  • Insulation to walls, lofts, floors, pipework and pipework fittings
  • Controls for heating and hot water systems such as timer, thermostats and thermostatic radiator valves
  • Draught Stripping to doors, windows, loft hatches and the like
  • Renewable energy systems of solar PV, wind turbines, water turbines, air source and ground source heat pumps, micro CHP, biomass boilers (but not biomass stoves)

These must not be ancillary to any other works (i.e. you can not claim reduced rate on roof insulation which is part of a larger roof replacement scheme or claim reduce rate on TRV’s when replacing the entire heating system)

Pipework, pipework fittings and lofts are frequently uninsulated and can represent a ‘quick win’ measure for churches to saving money on their heating costs.

The DAC is advising all parishes of these imminent changes, and encourages anyone planning changes to act quickly to undertake these works with a reduced rate of VAT.

If you have any questions, please contact the DAC > http://cofeguildford.org.uk/diocesan-life/dac/

More info

> HMRC

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