VAT Reduction Demanded on New Boiler Installations

We are fully supporting the growing industry campaign seeking to persuade the government to cut the rate of VAT charged on high-efficiency boiler installations.

Boilers in the UK are subject to the full 20 per cent rate but other energy-saving equipment, such as controls, insulation, combined heat and power systems, biomass boilers, heat pumps and solar panels attract a 5 per cent rate.

The reduced rate applies to energy-saving installations in all residential properties and commercial buildings used by charities. Installations of these systems in new properties are zero VAT rated.

Leading figures are calling for this to be extended to boilers and passive flue heat recovery systems.

Last year’s boiler scrappage scheme saw sales of domestic boilers rise by 5.3 per cent in the final quarter of last year, according to the Heating and Hotwater Industry Council. However, the market has fallen back again since the start of 2011.

Peter Thom, chair of the Heating Strategy Group of the Energy Efficiency Partnership for Homes, has petitioned Chancellor George Osborne but was still awaiting a reply.

The HVCA is also backing the campaign. Its head of sustainability David Frise said cutting the VAT could be a well-timed move.

The campaign is to support the letter sent to the Chancellor of the Exchequer on the 28th February 2011 requesting the reduction of VAT to 5% on professionally installed domestic central heating boilers and passive flue heat recovery.

At the moment there is an anomaly as professionally installed heating controls, insulation and solar panels are at the lower rate of 5% but the boiler is at the higher rate of 20%, even though this will save the most amount of energy and carbon. The latest innovation, flue heat recovery, is also blighted with this higher rate.

The Coalition aspirations for saving energy are relying on the Green Deal which will not be available until late 2012 or even later due the complex legislation required. It would therefore be suggested that this proposed reduction in VAT is for a limited period to be introduced immediately for 2 years and then reviewed if and when when the Green Deal is introduced.

To find out about and sign the Cut the VAT campaign, visit www.grumble.org.uk.

 

Comments are closed.