Mission Zero – UK Review of Strategy for Delivery

A detailed review report from an Independent panel which took evidence from people and organisations across all four nations of the UK has been issued this month.

MISSION ZERO - Independent Review of Net Zero (publishing.service.gov.uk)

Whilst the recommendations include creating parity of treatment on VAT in terms of the VAT rate which is applied to Electric Vehicle charging at private homes (5% VAT rate) to commercial charging points (20% VAT rate); there is no mention of the extra VAT burden which is created by the current VAT legislation on the VAT treatment of the supply and installation of energy-saving materials. This VAT burden is created when landlords – including those in the social housing sector – are unable to benefit from the Zero VAT rate on the element of bought in goods and services to improve energy efficiency in homes when those works – fitting insulation, solar panels, or air source heat pumps for example – form only a part of a wider single contract for improvements to the dwellings.

The review comments on the benefits to be achieved from retrofit projects of housing stock yet fails to address this anomaly in the VAT treatment.

For housing associations across the UK, this inflexibility in VAT treatment is increasing costs for energy improvement works by 20%.  Will the Chancellor address this point in the Spring Budget? We’ll have to wait and see.

In the meantime should VAT get complicated for your property improvement projects, then do get in touch at emailus@centurionvat.com

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