The energy-saving (VAT) lightbulb’s blown.

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 Unfortunately, that relief is now being withdrawn.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…

For more information, have a look at the HMRC paper, have a read of my Charity Tax Map summary, or contact me: andrewkmackay[at]gmail.com and @BetterCharity.

Advertisements

Leave a Reply

Fill in your details below or click an icon to log in:

WordPress.com Logo

You are commenting using your WordPress.com account. Log Out /  Change )

Google+ photo

You are commenting using your Google+ account. Log Out /  Change )

Twitter picture

You are commenting using your Twitter account. Log Out /  Change )

Facebook photo

You are commenting using your Facebook account. Log Out /  Change )

Connecting to %s