Market leading insight for tax experts
View online issue

Damp-proofing products standard rated for VAT

printer Mail

HMRC has confirmed it will require businesses to account for VAT at the standard rate on damp-proofing products, such as paints, creams or gels, with effect from 1 September 2018.

In Revenue and Customs Brief 9/2018, HMRC makes explicit that it does not regard these products as energy-saving materials that qualify for the reduced rate of VAT. HMRC is aware of businesses marketing damp-proofing products as energy-saving materials, and notes the First-tier Tribunal decision in Safeguard Europe Ltd (TC02543) [2013] UKFTT 145 (TC), which supported this position in relation to one particular product.

However, HMRC’s view is that the main purpose of the products is to water-proof exterior walls, rather than improve thermal efficiency. These products are not normally described as insulators, and any improved thermal efficiency would be incidental to the main purpose of water-proofing.

HMRC states that the brief overrides any decisions previously issued that are inconsistent with this view. See

Issue: 1409
Categories: News , Indirect taxes , VAT