Plans to increase tax for energy saving materials are up for consultation. Businesses who supply and install energy saving materials (ESMs) are being urged to feedback to HMRC regarding potential VAT changes ahead of a 3 February deadline. August 2016 could see the implementation of new legislation which would mean that the rate of VAT on some ESMs increases from 5% to 20%.
In June 2015 the European Court of Justice ruled that the UK cannot apply a reduced VAT rate for supply or installation of certain ESMs. The court found that the UK had implemented an EU relief incorrectly by failing to restrict the benefits to certain social groups or those with social needs, and covering installation of items that did not constitute “provision, construction, renovation and alteration of housing”.
As a result of this the Government intends to amend the relevant legislation, retaining as much of the relief as possible, whilst also ensuring the UK law is fully compliant with EU law. The main proposals are:
- Solar panels, wind turbines and water turbines will be removed from the list of ESMs as they are seen as means of generating electricity rather than renovating a property
- The 5% rate will continue for supplies of the remaining ESMs made to housing associations, installations in relevant residential buildings and to “qualifying persons” aged over 60 or in receipt of certain benefits
- The 5% relief will apply to the installation service only (not the cost of materials) for other residential installations where the cost of materials exceeds the cost of the installation services. HMRC provide an example of a CHP boiler where the boiler might cost £4k and the installation £2k. In this example the 5% rate would apply to the £2k installation cost but the boiler would be subject to 20% VAT
Speaking about the changes, Liz Maher, director for Centurion VAT Specialists, said: “If the proposal is successful, it could mean a big change to the renewable energy industry. It is
clear that suppliers and customers of solar panels, wind turbines and water turbines will be affected the most, as potential customers could be put off by the hike in VAT. “Businesses who supply and/or install ESMs need to be diligent now and have all the necessary documentation to ensure they are paying the right VAT on the transactions with their clients. This would mean obtaining extra documentation and added work. For some this will be daunting which is why we would advise people to speak to a VAT specialist to ensure they understand it fully.”
The proposed implementation date is 1st August 2016 and the consultation document states that the reduced rate will apply to any payments made or contracts signed prior to the implementation date.
HMRC has invited those who supply and/or install ESMs to provide commentary on the issue. Deadline for comments is 3 February 2016.
If you would like to discuss the implications of the proposed changes, please contact
Centurion on 01633 415390 or email@example.com
A Good Look At How Homes Will Become More Energy Efficient Soon
Everyone always talks about ways they can save energy at home, but the tactics are old school. They’re only tweaking the way they do things at the moment. Sealing holes in your home isn’t exactly the next scientific breakthrough we’ve been waiting for.
There is some good news because technology is progressing quickly. Some tactics might not be brand new, but they’re becoming more popular. Here are a few things you should expect to see in homes all around the country within a few years.
1. The Rise Of Smart Windows
When you look at a window right now it’s just a pane of glass. In the future they’ll be controlled by microprocessors and sensors. They’ll change depending on the specific weather conditions directly outside.
If the sun disappears the shade will automatically adjust to let in more light. The exact opposite will happen when it’s sunny. These energy efficient windows will save everyone a huge amount of money.
2. A Better Way To Cool Roofs
If you wanted to cool a roof down today you would coat it with a material full of specialized pigments. This would allow roofs to deflect the sun and they’d absorb less heat in the process too.
Soon we’ll see the same thing being done, but it will be four times more effective. Roofs will never get too hot again. Anyone with a large roof is going to see a sharp decrease in their energy bills.
3. Low-E Windows Taking Over
It’s a mystery why these aren’t already extremely popular, but things are starting to change. Read low-E window replacement reviews and you’ll see everyone loves them because they’re extremely effective.
They’ll keep heat outside in summer or inside in winter. People don’t even have to buy new windows to enjoy the technology. All they’ll need is a low-E film to place over their current ones.
4. Magnets Will Cool Fridges
Refrigerators haven’t changed much in a very long time. They’re still using a vapor compression process that wastes energy while harming the environment. It won’t be long until they’ll be cooled using magnets instead.
The magnetocaloric effect is going to revolutionize cold food storage. The fluid these fridges are going to use will be water-based, which means the environment can rest easy and energy bills will drop.
5. Improving Our Current LEDs
Everyone who spent a lot of money on energy must have been very happy when LEDs became mainstream. Incandescent light bulbs belong in museums today because the new tech cut costs by up to 85 percent.
That doesn’t mean someone isn’t always trying to improve on an already great invention. The amount of lumens LEDs produce per watt isn’t great, but we’ve already found a way to increase it by 25 percent.
Maybe Homes Will Look Different Too
Do you think we’ll come up with new styles of homes that will take off? Surely it’s not out of the question. Everything inside homes seems to be changing for the better with each passing year. It’s going to continue doing so thanks to amazing inventors.
ShutterStock – Stock photo ID: 613912244
IEMA Urge Government’s Industrial Strategy Skills Overhaul To Adopt A “Long View Approach”
IEMA, in response to the launch of the Government’s Industrial Strategy Green Paper, have welcomed the focus on technical skills and education to boost “competence and capability” of tomorrow’s workforce.
Policy experts at the world’s leading professional association of Environment and Sustainability professionals has today welcomed Prime Minister Teresa May’s confirmation that an overhaul of technical education and skills will form a central part of the Plan for Britain – but warns the strategy must be one for the long term.
Martin Baxter, Chief Policy Advisor at IEMA said this morning that the approach and predicted investment in building a stronger technical skills portfolio to boost the UK’s productivity and economic resilience is positive, and presents an opportunity to drive the UK’s skills profile and commitment to sustainability outside of the EU.
Commenting on the launch of the Government’s Industrial Strategy Green Paper, Baxter said today:
“Government must use the Industrial Strategy as an opportunity to accelerate the UK’s transition to a low-carbon, resource efficient economy – one that is flexible and agile and which gives a progressive outlook for the UK’s future outside the EU.
We welcome the focus on skills and education, as it is vital that tomorrow’s workforce has the competence and capability to innovate and compete globally in high-value manufacturing and leading technology.
There is a real opportunity with the Industrial Strategy, and forthcoming 25 year Environment Plan and Carbon Emissions Reduction Plan, to set long-term economic and environmental outcomes which set the conditions to unlock investment, enhance natural capital and provide employment and export opportunities for UK business.
We will ensure that the Environment and Sustainability profession makes a positive contribution in responding to the Green Paper.”
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