Vat rates

[Greenday]

What exactly qualifies for reduced 5% VAT on a heat pump installation?

the way I've always viewed it is in a retro fit situation the whole installation including including HP, controls and rad upsizing to achieve an SPF of at least 2.5 is charged at 5% VAT.

A completely new installation would qualify for 5% on the heat pump install only and the rest of the system would be standard rate.

I have heard of installers charging 5% just on the heat pump and controls and charging standard rate for anything else on a retrofit.

what do you guys do.

Revenue guide states charge standard rate on everything on a completely new heat pump installation

 

[jason121]

Hope this helps[h=2]What qualifies for the lower rates of VAT?
Installation of any of the following qualifies for the lower rate of VAT:

• controls for central heating and hot water systems
• draught insulation (eg around windows and doors)
• insulation on walls, floors, ceilings, lofts, etc
• solar panels
• wind turbines
• water turbines
• ground-source heat pumps
• air-source heat pumps
• micro combined heat and power units
• wood-fuelled boilers

You can only get these lower rates if the energy saving materials are actually installed, and the work is done on your home. You'll be charged the lower rate on the installation work itself as well as the materials.
You'll also get the lower rate on any necessary extra work that needs to be done as part of the installation - this doesn't apply if you're having them installed as part of a larger project such as building a new roof or an extension, or installing a central heating system.[/h]

 

[Worcester]

The Revenue guide HM Revenue & Customs: Paying reduced rate VAT on energy-saving materials says:

What qualifies for the lower rates of VAT?
Installation of any of the following qualifies for the lower rate of VAT:

• controls for central heating and hot water systems
• draught insulation (eg around windows and doors)
• insulation on walls, floors, ceilings, lofts, etc
• solar panels
• wind turbines
• water turbines
• ground-source heat pumps
• air-source heat pumps
• micro combined heat and power units
• wood-fuelled boilers

You can only get these lower rates if the energy saving materials are actually installed, and the work is done on your home. You'll be charged the lower rate on the installation work itself as well as the materials.

and goes on to say

You'll also get the lower rate on any necessary extra work that needs to be done as part of the installation - this doesn't apply if you're having them installed as part of a larger project such as building a new roof or an extension, or installing a central heating system.

So on a retrofit project (so long as there is already a central heating system in place) then all the work would be at 5%

New work as you say, the items listed above only at 5%

However, here's a twist

You could consider the RHPP or RHI as a 'grant' as it is government money and the govt had to get EU approval to do it ..

Grants for energy saving equipment
If you get a grant towards the installation of certain energy saving equipment, and it's being installed in your main or only home, you'll pay a lower rate of VAT.

If you're 60 or older, you'll get the lower rate on the installation, maintenance or repair of a central heating system, and a renewable source heating system.

If you get one of the following benefits, you'll get the lower rate on the installation of heating appliances such as specific types of immersion heaters, boilers, storage heaters, gas heaters and radiators:

• child tax credit - other than the family element
• council tax benefit
• disability living allowance
• disablement pension
• housing benefit
• income-based job seeker's allowance
• income support
• war disablement pension
• working tax credit

The reduced rate of VAT also applies to grant-funded repairs and replacements of this kind of equipment, even if the original system was not grant-funded.

 

[Greenday]

Hope this helpsWhat qualifies for the lower rates of VAT?
Installation of any of the following qualifies for the lower rate of VAT:

• controls for central heating and hot water systems
• draught insulation (eg around windows and doors)
• insulation on walls, floors, ceilings, lofts, etc
• solar panels
• wind turbines
• water turbines
• ground-source heat pumps
• air-source heat pumps
• micro combined heat and power units
• wood-fuelled boilers

You can only get these lower rates if the energy saving materials are actually installed, and the work is done on your home. You'll be charged the lower rate on the installation work itself as well as the materials.
You'll also get the lower rate on any necessary extra work that needs to be done as part of the installation - this doesn't apply if you're having them installed as part of a larger project such as building a new roof or an extension, or installing a central heating system.

I had read that but doing a boiler change and upgrading some radiators to make your new renewable appliance efficient and RHI qualifying isn't installing a full central heating system is it.

I will phone the revenue for some clarification.

Any other opinions or knowledge out there?

 

[Worcester]

We consider that replacing an oil or lpg boiler and installing a GSHP, all the controls, groundloops, manifolds, thermal stores, buffer tanks new DHW cylinders, and any radiator replacements at 5% as for example the radiator replacements are "extra work that needs to be done.."

 

[SibertSolar]

Whatever happened to the battle between the EU Commission and HMRC Treasury about the supposed loophole surrounding our 5% VAT rate for "energy saving measures"? Was it put to bed in the end? I lost track of it during the EU/China anti-dumping process....

 

[Greenday]

Thanks all that assures me were doing the the right thing. Wonder what the installer I came across charging 20% for everything but the heat pump install is doing with the extra 15%

 

[Earthstore]

Of course I would not condone this, but you could always make the heatpump very expensive to supply and install, this could then cover the cost of any other work carried out, therefore Charging the customer 5% Vat on total invoice, saving 15% on all other works.. All arses covered....

 

[Greenday]

I wouldn't condone it either especially when your asked for all the invoices and costs
on that job on the next VAT inspection!