How do recent tax rulings affect insulation in the ECO scheme
How do recent tax rulings affect insulation in the ECO scheme Jan 27, 2020
The final price paid by consumers for measures which save energy has been increased by the Government as the VAT rate on energy efficient and low carbon solutions for homes has been raised.
Previously the VAT applied to energy efficiency measures such as insulation and low carbon heating technologies like heat pumps, biomass boilers and micro combined heat and power, was at a reduced rate of 5%.
For insulation and low carbon heating the reduced rate could remain available to those who meet a ‘social policy test’ (60 years or over and in receipt of certain benefits or a ‘relevant housing association’).
The reduced rate may also apply when the value of the materials does not exceed 60% of the consumer costs for installing the energy saving measure.
YES are expressing concerns that the rulings don't align with ECO funding and are in discussions with several organisations.
The changes remain consistent with the requirements of existing legislation governing the application of VAT in the EU.