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VAT and energy saving materials: withdrawal of reduced rate

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HMRC is seeking views on the potential impact of the withdrawal from August 2013 of the VAT reduced rate from the supply and installation of energy-saving materials in buildings used for a relevant charitable purpose.

Budget 2012 announced that Finance Bill 2013 would withdraw ‘charitable buildings’ from the scope of the reduced rate. Revenue & Customs Brief 26/12, published on Monday, said the action followed ‘pre-infraction communication’ with the European Commission, which ‘pointed out that this reduced rate is not permitted under European law’.

HMRC invited comments by 20 October 2012 on the proposed withdrawal date of 1 August 2013 and whether there are any particular factors that HMRC should take into account when making the change.