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 https://bit.ly/2A2VUSV.
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 https://bit.ly/2A2VUSV.
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