The energy-saving (VAT) lightbulb.
It was good while it lasted, but now it’s blown.
The UK Government had introduced a reduced VAT rate for installing energy-saving materials in buildings that were solely used for a relevant charitable purposes. Unfortunately, that relief is now being withdrawn.
This is likely to mostly affect charities that use village halls or similar buildings. The big switch off will come into effect for materials supplied on and after 1 August 2013.
This not so bright idea was a response to the European Commission’s investigation of the UK’s reduced rate of VAT on the installation of energy-saving materials in residential accommodation and ‘charitable buildings’.
The Commission considered that there was no legal basis for such a reduced rate of VAT. The UK government, to give them their credit, disagreed but has now accepted that the VAT relief should only now apply to housing.
This means that from August 2013 it will not extend to ‘charitable’ buildings which are not housing, to ensure that UK legislation fully complies with EU law.
Which does leave the question hanging.
I wonder just how many civil servants it really took to change this particular VAT light bulb…