newhome Posted July 24, 2018 Share Posted July 24, 2018 I have just had my vat refund so will now have to pay vat on my next heating installation but am a bit confused by the rate that will be charged. When I was a self builder I could ask for all supply and fit work to be zero rated. If I bought the goods I would pay the vat and reclaim it. That’s simple and straightforward. As I have recently moved from self builder to ‘home owner’ I now have to pay vat on my next installation but I am confused by the rates. I understand that some energy saving materials are charged at the reduced rate of 5% if the equipment is installed. But if I buy the equipment supply only it is standard rate? So using this example as I am considering installing an ASHP. If I buy the ASHP and DIY the installation I will be charged 20%. If I have it installed as supply and fit ASHP installations are rated at 5%, and if that was all that needed to be done it would be charged at 5%. I assume any ancillary bits and bobs (connectors or whatever) would also be at 5%? If however I wanted it to be connected to a thermal store for example would that count as ‘installation of energy-saving materials with other goods and services’ with the whole thing rated @ 20%? If so presumably I could ask for the ASHP to be installed as a separate job from the cylinder and receive 2 invoices accordingly? And what about heat batteries eg Sunamp? If I buy one and install it myself it’s 20% but if I get an installer to do it it’s 5%? I couldn’t see whether heat batteries were included in the vat notice at all in truth. It was far easier when I was a self builder! Link to comment Share on other sites More sharing options...
Guest Alphonsox Posted July 24, 2018 Share Posted July 24, 2018 39 minutes ago, newhome said: I have just had my vat refund so will now have to pay vat on my next heating installation but am a bit confused by the rate that will be charged. When I was a self builder I could ask for all supply and fit work to be zero rated. If I bought the goods I would pay the vat and reclaim it. That’s simple and straightforward. I'm not sure where you have got to with the paper work, but I believe supply and fit remains zero rated until the house is complete (completion certificate issued). The fact that you have claimed a VAT refund doesn't effect this. Link to comment Share on other sites More sharing options...
newhome Posted July 24, 2018 Author Share Posted July 24, 2018 22 minutes ago, Alphonsox said: I'm not sure where you have got to with the paper work, but I believe supply and fit remains zero rated until the house is complete (completion certificate issued). The fact that you have claimed a VAT refund doesn't effect this. All done. Completion certificate was issued in Dec. Link to comment Share on other sites More sharing options...
ragg987 Posted July 24, 2018 Share Posted July 24, 2018 When I had some heating changes in my old house, the plumber did it as one job (one invoice) but showed VAT at different rates depending on which aspect. So the "energy saving features" - e.g. radiator thermostatic valves - were charged at the lower rate and the rest at the higher one. He asked VATman for guidance on how much labour to charge at the lower rate and was told it needed to represent the labour for the 5% elements. Link to comment Share on other sites More sharing options...
newhome Posted July 24, 2018 Author Share Posted July 24, 2018 1 minute ago, ragg987 said: When I had some heating changes in my old house, the plumber did it as one job (one invoice) but showed VAT at different rates depending on which aspect. So the "energy saving features" - e.g. radiator thermostatic valves - were charged at the lower rate and the rest at the higher one. He asked VATman for guidance on how much labour to charge at the lower rate and was told it needed to represent the labour for the 5% elements. That's odd because that seems at odds to the VAT notice in this respect. The following specifically says that radiator valves must be standard rated when supplied with other non qualifying examples. Energy-saving materials and heating equipment (VAT Notice 708/6) How to account for VAT if you’re a contractor or subcontractor installing energy-saving materials and grant-funded heating equipment. 2.3.3 Installation of energy-saving materials with other goods and services Sometimes when individual goods and services are provided together, there is not a single dominant supply and so the individual goods and services supplied together have equal importance, often taking the form of something else. For example, a central heating system may consist of a conventional boiler, radiators, copper pipe, radiator valves, heating controls and so on. Supplied together, they form a single supply of a central heating system. While some components of the central heating system may be reduced rated if supplied on their own, here they’re part of a wider supply of a central heating system and since a whole central heating system is not included in the list of energy saving materials eligible for the reduced rate (see paragraph 2.5) the whole supply is standard rated. https://www.gov.uk/guidance/vat-on-energy-saving-materials-and-heating-equipment-notice-7086 Link to comment Share on other sites More sharing options...
ragg987 Posted July 24, 2018 Share Posted July 24, 2018 That seems pretty clear to me. I am talking a few years ago so maybe the guidance has updated. 1 Link to comment Share on other sites More sharing options...
Temp Posted July 25, 2018 Share Posted July 25, 2018 On 24/07/2018 at 13:22, Alphonsox said: I'm not sure where you have got to with the paper work, but I believe supply and fit remains zero rated until the house is complete (completion certificate issued). The fact that you have claimed a VAT refund doesn't effect this. Thing is you can't reclaim the VAT until the house is completed. A completion certificate is just one way of proving it's completed but the HMRC do accept other methods. What you tell the heating installer is up to you :-) Link to comment Share on other sites More sharing options...
Nickfromwales Posted July 25, 2018 Share Posted July 25, 2018 On 24/07/2018 at 20:24, newhome said: the list of energy saving materials eligible for the reduced rate (see paragraph 2.5) Im off to find this. any links anyone? Link to comment Share on other sites More sharing options...
newhome Posted July 25, 2018 Author Share Posted July 25, 2018 3 minutes ago, Nickfromwales said: I'm off to find this. Any links anyone? You been drinking? The link was in the same post . I couldn't see how Sunamps (for example as they are often discussed on here) qualified for 5% vat unless they were installed alongside one of the other energy saving materials / products and counted as 'ancillary supplies'. So alongside an ASHP or PV for example. 2.5 Energy-saving materials covered by the reduced rate The reduced rate applies to the installation of: controls for central heating and hot water systems (see paragraph 2.6) draught stripping (see paragraph 2.7) insulation (see paragraph 2.8) solar panels (see paragraph 2.9) wind turbines (see paragraph 2.10) water turbines (see paragraph 2.11) ground source heat pumps (see paragraph 2.12) air source heat pumps (see paragraph 2.13) micro combined heat and power units (see paragraph 2.14) wood-fuelled boilers (see paragraph 2.15) https://www.gov.uk/guidance/vat-on-energy-saving-materials-and-heating-equipment-notice-7086 Link to comment Share on other sites More sharing options...
Nickfromwales Posted July 26, 2018 Share Posted July 26, 2018 Link to comment Share on other sites More sharing options...
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