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Resources

The greenish tax?

Resources

The greenish tax?

This page was last updated on December 6, 2018

VAT isn't known for having particularly green credentials but it does have a bit of a social conscience.

This is most visible when looking at sectors such as food, children’s clothing, education, welfare and health where there are very specific reliefs.

What is less well known is that there are some reliefs aimed at encouraging use of ‘energy saving materials’ where the rate of 5% rate can be applied rather than the full 20%. Of course, as this is VAT law, the relief is restricted and only apply to the following:

The items on the list are strictly interpreted .  For example, relief applies to the supply and installation of loft insulation but not to installation of a thermally-efficient replacement roof as decided in a recent VAT Tribunal Case, HMRC v Wetheralds Construction.

There's also a relief for the grant-funded installation of heating equipment. But this is not confined to energy-saving heating systems so isn't really a ‘green’ relief.

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