Draft legislation: VAT (Reduced Rate) (Energy-Saving Materials) Order 2019

By Technical Team on 10 Apr 2019

HMRC has published consultation documents for the draft legislation that amends the scope of the VAT relief for the installation of energy-saving materials (ESMs) in residential accommodation, to comply with CJEU ruling C-161/14 - Commission v United Kingdom dated 4 June 2015. The document pack includes the draft legislation, draft TIIN, draft explanatory memorandum and draft guidance.

HMRC states that the proposed amendments will:

  • maintain the reduced rate on installations of ESMs in residential accommodation for recipients who are aged 60 or over or receiving certain benefits, and for housing associations
  • remove the reduced rate for the installation of wind and water turbines
  • maintain the reduced rate for all other installations in residential accommodation where the cost of the materials does not exceed 60% of the total cost of installation

Please provide any feedback you would like to contribute to the CIOT’s response (clarity/effectiveness of the legislation, unintended consequences etc) to the consultation to techncial [at] ciot.org.uk by Tuesday 23 April 2019.

Technical Team