The Glass and Glazing Federation (GGF) has expressed real concern regarding the absence of energy efficient glazing in the list of energy-saving materials highlighted by HM Revenue and Customs (HMRC) for a reduced rate of five per cent VAT.
HMRC’s consultation on “Changes to the reduced rate of VAT for Energy Saving Materials” was published late last year and the GGF has responded on behalf of its Membership by urging the UK Government to bring its reduced rates in line with the European Directive which permits countries within the EU to apply for reduced rates for “provision, construction, renovation and alteration of housing, as part of a social policy”.
Giles Wilson, managing director, GGF, said: “Replacement windows and doors have not previously been included within the reduced VAT rate despite being vital energy saving products which could legitimately qualify under the criteria described in the European Directive.
“It is time for the UK Government to comply with EU legislation and to appreciate the importance of energy efficient glazing in the broad economic, social and environmental context.”
The GGF also listed considerations for HMRC to include in any forthcoming changes to VAT on energy-saving materials, most notably:
· Provision for a whole house approach to energy-saving materials used to make properties energy efficient.
· The key reason for replacing windows and doors is now for improving a property’s energy efficiency (43 per cent – source: Palmer Research Report 2014).
· The GGF Membership estimates a growth of 20 per cent in the sector in the event reduced five per cent VAT rates are awarded.
“We have collaborated for the last six weeks with our Members, other industry bodies and GK Strategy our political advisors before submitting this response,” added Wilson.
“Our messages are clear and we are willing to meet with officials from HMRC to help them plan a smooth implementation of our proposals should they be included in the policy changes.”
The outcome of the consultation and any potential amendments to the government’s VAT policy are expected to be published in the summer, with any changes potentially included in the autumn Finance Act 2016.
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