BMF claims victory on Government climbdown over reduced VAT for energy-saving materials
The Builders Merchants’ Federation (BMF) has welcomed the announcement that the Government will keep the current reduced rate of Value-Added Tax on the supply and professional installation of energy-saving materials despite losing a European court case last year.
On Monday the Prime Minister told the House of Commons that his Government will not oppose a move by Conservative MPs - acting with the Labour Party - to stop VAT on insulation, heating & hot water system controls, heat pumps, and solar panels being levied at the 20% standard rate.
Since June 2012, the BMF has been working with economists and Government representatives to keep 5% VAT on energy-saving materials defined in eleven product categories under EU law. In particular materials and products affected are: - insulation for walls, floors, ceilings, roofs or lofts, or water tanks, pipes or other plumbing fittings; - draught-stripping for windows & doors; - central heating system controls inc. thermostatic radiator valves;- hot water system controls;- solar panels;- wind and water turbines; - air-source and ground-source heat pumps; - micro-combined heat and power units; - boilers fuelled by wood, straw or similar plant matter.
Brett Amphlett, BMF Policy & Public Affairs’ Manager, commented: “We are very pleased the Government will keep the reduced rate on materials and products that BMF members distribute. This is a significant victory for the BMF and a good news for merchants, manufacturers, solar panel installers and insulation contractors".
“Now the legislation has been passed, improvements can continue to enjoy the 5% rate to make homes warmer, cut bills and save money. omorrow (Thursday) Energy and Climate Change ministers will be in the House for their monthly question time. I hope, by then, the Government will have clarified its position so we know how ministers intend to keep existing relief despite being at odds with EU law and the court ruling”, Mr Amphlett concluded.