VAT on ceiling speakers

[joth]

Notice 708 section 13.9 specifically excludes ceiling speakers from 0% VAT on elidable new dwellings.

https://www.gov.uk/guidance/buildings-and-construction-vat-notice-708#section13

 

However, burglar alarms, smoke detectors and (one assumes) doorbells are 0% VAT. If the ceiling speakers are used as the sounder for those items, would the inclusion criteria override the exclusion criteria?

 

Interestingly wiring for the ceiling speakers is 0% VAT and one assumes a fire and accoustic hood for it also is (as that's no electrical equipment) so it's just the speaker itself (and installation of?) that's at question.

 

 

[Nickfromwales]

3 minutes ago, joth said:

If the ceiling speakers are used as the sounder for those items, would the inclusion criteria override the exclusion criteria?

Only if you could prove that they were the ONLY sounders, eg that the equipment relied on a 3rd party item to complete the functioning system. If the doorbell makes a noise out of the box, it's a very thin bit of ice you'd be skating on imho. Is it really worth the aggravation of an inspection for a couple of tenners?

[joth]

10 minutes ago, Nickfromwales said:

Only if you could prove that they were the ONLY sounders, eg that the equipment relied on a 3rd party item to complete the functioning system. If the doorbell makes a noise out of the box, it's a very thin bit of ice you'd be skating on imho. Is it really worth the aggravation of an inspection for a couple of tenners?

Most modern doorbells (Ring Nest etc) make a noise externally, but not internally to the building, so do need some sort of noise generation device. It could be shown at point of completion the speakers are ONLY used for alarm/bell sounder. Function is software defined, so what the occupiers chose to do with it the day after that is another matter....

 

The VAT on materials alone will be nearer £200 than a coupler of tenners, but agree it's not worth it for the financial gain. The motivation is more about simplifying administrative work: giving the option to put an entire smart controls contract on one VAT rate rather than having to itemize the design/supply/install/commissioning work by equipment/function. 

Edited January 24, 2023 by joth

[Nickfromwales]

8 minutes ago, joth said:

Most modern doorbells (Ring Nest etc) make a noise externally, but not internally to the building, so do need some sort of noise generation device. It could be shown at point of completion the speakers are ONLY used for alarm/bell sounder. Function is software defined, so what the occupiers chose to do with it the day after that is another matter....

 

The VAT on materials alone will be nearer £200 than a coupler of tenners, but agree it's not worth it for the financial gain. The motivation is more about simplifying administrative work: giving the option to put an entire smart controls contract on one VAT rate rather than having to itemize the design/supply/install/commissioning work by equipment/function. 

Ok. Yup. Then the OP should say speakers, amplifiers, cables + install etc? Or are these £1k speakers?

[joth]

3 hours ago, Nickfromwales said:

Ok. Yup. Then the OP should say speakers, amplifiers, cables + install etc? Or are these £1k speakers?

12 speakers at £90 each, but it's not really relevant to the OP as I wasn't asking for help with simple additive mathematics, I was asking for clarification if "exclusion" or "inclusion" examples take precedents when an item qualifies for both. 

 

[jack]

26 minutes ago, joth said:

12 speakers at £90 each, but it's not really relevant to the OP as I wasn't asking for help with simple additive mathematics, I was asking for clarification if "exclusion" or "inclusion" examples take precedents when an item qualifies for both.

 

There's no hard and fast rule - HMRC basically does what they want, and in general that involves rejecting things unless there's a clear case to the contrary.

 

Personally, I suspect there's no way you'll win an argument that you've installed a grand's worth of speakers to hear a doorbell.

[Nickfromwales]

2 hours ago, jack said:

Personally, I suspect there's no way you'll win an argument that you've installed a grand's worth of speakers to hear a doorbell.

In a nutshell.

 

2 hours ago, joth said:

but it's not really relevant to the OP as I wasn't asking for help with simple additive mathematics,

Very relevant actually, unless you'll assume they're blind / inept at the good ol' HMR of C   They would use their "additive mathematics" to tell you to stop taking the Micheal.

A Ring chime is £30. Try fitting that instead?

[Pocster]

4 hours ago, jack said:

Personally, I suspect there's no way you'll win an argument that you've installed a grand's worth of speakers to hear a doorbell.

I probably have .

[Bozza]

An interesting post.

 

I think the HMRC officials, in addition to the guidelines, will probably be considering the level of confidence they have that if they reject something unclear or potentially arguable, and the claimant appeals, whether their decision is likely to be vindicated, or overturned in a hearing.

 

The further along the iffy scale, to the point where it tips to “taking the complete piss” the more confidence they will have in saying nope, in language other than “because you’re taking piss”.

 

Perhap put yourself in the shoes of the tax official whose job is to ensure that correct & legitimate refunds are authorised, whilst protecting the interest of the tax payer.

For your scenario, if for example you were deaf and you doorbell was connected to flashing lights in each room  to alert you, and that was their only purpose, I’m pretty sure that would be entirely ok to claim for the flashing light, as it’s an integral part of the doorbell system.  If however the doorbell was connected a laser light show and a podium that raises for dancing girls in a party room, probably not.

 

Here’s another one….you can claim for towel rails.  The list doesn’t mention a fixed pole for pole dancing, but could I claim?….

[Pocster]

2 minutes ago, Bozza said:

Here’s another one….you can claim for towel rails.  The list doesn’t mention a fixed pole for pole dancing, but could I claim?….

I’m installing one to find out !

[joth]

3 hours ago, Nickfromwales said:

In a nutshell.

 

Very relevant actually, unless you'll assume they're blind / inept at the good ol' HMR of C   They would use their "additive mathematics" to tell you to stop taking the Micheal.

A Ring chime is £30. Try fitting that instead?

 

No, their value is really not relevant, actually. I didn't ask "can I get away with it", which seems to be what you're answering. I asked which rule takes precedence and the answer would seem to be ceiling speakers are excluded regardless of their purpose or value. So whether it's a £1 or £10,000 speaker and even if it's only used for a doorbell or a nightclub grade party, they're all going to treated the same: full VAT.

And that's a fine answer. I'm not trying to argue against it, just wanted confirmation of it which you already gave in your first response, and I thank you for that.

 

 

(Elsewhere in notice 708 it gives clear examples that the cost of the item is irrelevant to whether it is considered "usually installed" or not, giving examples around fancy taps)

[Bonner]

11 hours ago, Bozza said:

Here’s another one….you can claim for towel rails.  The list doesn’t mention a fixed pole for pole dancing, but could I claim?….

 

Only if it is heated

[Drellingore]

@joth I don't think any of us will be able to provide a conclusive answer. The HMRC VAT Construction manual gives some guidance on what is an electrical appliance (and therefore standard-rated), but it doesn't cover your particular case.

 

There is an example of a powered gate not being eligible for zero/reduced rating, despite being part of a security system. This is the closest that I could find, apologies if this is too tenuous to be relevant, and best of luck getting it clarified. FWIW I called the HMRC self-build line the other day and got through in 20 minutes, so it might be worth given them a call.

 

 

Quote

 

The fact that an electric gate is part of the security system is not relevant. It is clearly not itself a burglar alarm within paragraph (c)(iii) of Note (22).

Electrically operated gates are typically supplied in one of two ways, namely as:

• an integral unit with, say, the gate post encompassing the operating mechanism

or

• separate units with the operating unit being, say merely attached to the gate by some form of lever or control arm.

In the latter case, an appropriate apportionment can be made between the gates and the electrical appliance operating them. Standard-rating applies to the electrical appliance.

 

 

 

[joth]

6 hours ago, Drellingore said:

@joth I don't think any of us will be able to provide a conclusive answer. The HMRC VAT Construction manual gives some guidance on what is an electrical appliance (and therefore standard-rated), but it doesn't cover your particular case.

 

There is an example of a powered gate not being eligible for zero/reduced rating, despite being part of a security system. This is the closest that I could find, apologies if this is too tenuous to be relevant, and best of luck getting it clarified. FWIW I called the HMRC self-build line the other day and got through in 20 minutes, so it might be worth given them a call.

 

 

 

 

Thanks! I doubt it's worth calling them. Notice 708 section 13.9 is pretty darn clear ceiling speakers are excluded, I was mostly posting on the off chance I'd missed some other section cancelling out that exclusion if used for security or accessibility or anything. with all the eyes on it here no one is aware of such a counter rule so that's good enough for me.

It's just a bit annoying for a smart home installer to have to apportion the materials and charge different vat when the vast majority is zero rated. One might ask if design, install, commissioning and programming should all be apportioned too. I'd be curious how many installers bother.