VAT abolished on solar panels insulation and heat pumps

[Radian]

I had hoped VAT might be reduced on insulation...

But now Rishi Sunak says homeowners will not have to pay VAT on solar panels, insulation and heat pumps for the next five years.

https://www.standard.co.uk/homesandproperty/property-news/spring-statement-2022-rishi-sunak-energy-saving-vat-cut-b989964.html

[SteamyTea]

Is that instead of any other incentives. I hope so.

[cwr]

That article says vat on insulation is 5%. Anywhere I've been to buy insulation it's 20%....

[ProDave]

I have not read the article, but I heard the speech live and it mentioned "installed heat pumps" and same for solar panels, so does this only men the 0% is supply and fit, or will you be able to buy one to DIY install at 0% VAT?

[GavH]

A speed read of the statement and it also only refers to installed EMS. Nothing about materials only.

[saveasteading]

Call me cynical but I expect this to require installation by an approved contractor or agency....again. 

Or a lot of paperwork and applications.

 

But I agree with the principle. No VAT on insulation would be  a very efficient fix for the reduction in energy use, and the nation would get a quick return.

[BMcN]

On 23/03/2022 at 15:58, ProDave said:

I have not read the article, but I heard the speech live and it mentioned "installed heat pumps" and same for solar panels, so does this only men the 0% is supply and fit, or will you be able to buy one to DIY install at 0% VAT?

 

The way it is worded it sounds like it's gli g from 5% to 0.  In which case it will only be on installs? 

 

My understanding is that the materials need to make up for no more than 60% of the install cost to qualify for the 5% rate.  Hence why we pay 20% to buy them for DIY? 

Edited March 24, 2022 by BMcN

[Gone West]

14 hours ago, BMcN said:

My understanding is that the materials need to make up for no more than 60% of the install cost to qualify for the 5% rate.  Hence why we pay 20% to buy them for DIY? 

AIUI as from 1st April 2022 the 60% rule no longer applies.

[joe90]

This might make my DIY PV instal a Goer, just need confirmation of zero VAT on the kit itself.

[Conor]

10 minutes ago, joe90 said:

This might make my DIY PV instal a Goer, just need confirmation of zero VAT on the kit itself.

That's a good point. The majority of the cost of my install was the mounting kit and inverter. Panels £2k, everything else £3k.

[ProDave]

Sorry to be the bearer of bad news, but as I feared the 0% only applies to supply and fit.  Sales of equipment only will still be 20% VAT

 

https://www.bimblesolar.com/budget22

 

More jobs for the boys. They don't really want us to install green energy products.

 

Don't shoot the messenger.

[Radian]

5 minutes ago, ProDave said:

Sorry to be the bearer of bad news, but as I feared the 0% only applies to supply and fit.  Sales of equipment only will still be 20% VAT

 

https://www.bimblesolar.com/budget22

 

More jobs for the boys. They don't really want us to install green energy products.

 

Don't shoot the messenger.

 

Does seem daft. If the old 60% rule no longer applies then might not a builder be contracted to supply the materials for a DIY install and charge a nominal sum for 'installation'?

[Carrerahill]

I have just had a look at a site for panels, and they claim it is on full systems only?!?

 

So if I wanted to top up with 4-5 panels, I won't get the 5% break, however, I think all the companies will just bump up their price 5% and leave it as was claiming "rising costs" prices never come down!

 

 

[ProDave]

1 minute ago, Radian said:

 

Does seem daft. If the old 60% rule no longer applies then might not a builder be contracted to supply the materials for a DIY install and charge a nominal sum for 'installation'?

If you can find such a VAT registered person to do that, it would probably work, to justify that he would surely have to do some "install" work, perhaps fix the rails to your roof and let you do the rest.

 

but unless it is someone you know, I doubt many would be wanting to put a substantial sum through their books with all the VAT paperwork for little income.

[joe90]

I do know a lecky that does solar as well, will give him a call if I decide to go ahead, might be worth a “bung” 🤷‍♂️

[Radian]

9 minutes ago, ProDave said:

If you can find such a VAT registered person to do that, it would probably work, to justify that he would surely have to do some "install" work, perhaps fix the rails to your roof and let you do the rest.

 

but unless it is someone you know, I doubt many would be wanting to put a substantial sum through their books with all the VAT paperwork for little income.

 

What I was thinking is that there may be some flexibility for self-builders who contract out certain elements of their builds. A good relationship with a builder might lead to some sort of arrangement that is of some financial benefit to both parties. I'm trying (and failing) to get my head around the reason for the materials themselves not to be tempoarily zero rated like children's clothes, books and newspapers.

 

[ProDave]

2 minutes ago, Radian said:

I'm trying (and failing) to get my head around the reason for the materials themselves not to be tempoarily zero rated like children's clothes, books and newspapers.

It is obviously NOT about maximising the amount of green energy products installed but all about prolonging schemes like MCS etc and trying to make it so DIY is impossible.

[joe90]

15 minutes ago, ProDave said:

and trying to make it so DIY is impossible.

If loft insulation was zero so many more people would install it IMO.

[Radian]

17 minutes ago, ProDave said:

It is obviously NOT about maximising the amount of green energy products installed but all about prolonging schemes like MCS etc and trying to make it so DIY is impossible.

This keeps on rearing its ugly head. Perhaps something like the Good Law Project should get involved in investigating the various schemes and their funding.

[saveasteading]

1 hour ago, ProDave said:

as I feared the 0% only applies to supply and fit.  Sales of equipment only will still be 20% VAT

I refer you to the answer I gave earlier.

 

On 23/03/2022 at 15:26, saveasteading said:

Call me cynical but I expect this to require installation by an approved contractor or agency....again. 

So they will again spend Millions of our money on administering the schemes, and hardly anything in grants.

It can no longer be ignorance and must be cynical (followed by a photo op of putting petrol into a borrowed small car)

[Radian]

3 hours ago, joe90 said:

If loft insulation was zero so many more people would install it IMO.

 

I see it also includes draught excluding strips -- who the ?*!# is going to hire a trade to install those?

[joth]

2 hours ago, saveasteading said:

On 23/03/2022 at 16:26, saveasteading said:

Call me cynical but I expect this to require installation by an approved contractor or agency....again. 

So they will again spend Millions of our money on administering the schemes, and hardly anything in grants.

It can no longer be ignorance and must be cynical (followed by a photo op of putting petrol into a borrowed small car

 

Yes and what's more, the supply and fit must be a standalone job, not part of a bigger job such as renewing a roof (as maybe required to install solar) or lining a building with airtight membrane. So doing a serious retrofit like to EnerPhit standard will still all be 20% VAT if instructed through a single main contractor, or if done DIY. The only way to get the savings is to pay lots of individual trades separately and risk the work not joining up, which is especially bad if EWI is not joined into other improvement work correctly (for example) allowing damp in.

 

Shame, it would have saved us about £8000 in vat if this was workable.

 

 

[Rob99]

Yet another example, I'm afraid, of a headline grabbing announcement which fails to deliver when you look closer into the detail.

[saveasteading]

26 minutes ago, Rob99 said:

headline grabbing announcement

anybody got the daily mail take on it?

[ProDave]

5 minutes ago, saveasteading said:

anybody got the daily mail take on it?

you asked. https://www.dailymail.co.uk/news/article-10643903/Rishi-Sunak-says-thanks-Brexit-able-axe-VAT-solar-panels.html

 

"Conservative MP Anthony Browne said: 'As energy bills rise, it was welcome to see the Chancellor recognise the important role energy efficiency can play by cutting VAT on energy saving materials such as solar panels, insulation and heat pumps to 0%."

 

Nope, he has NOT cut the VAT on "materials" he has cut the VAT on supply and fit.