KBzine: the original kitchen and bathroom industry e-news - since 2002
28th January 2021
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I'm sure I'm not the only one who's been thinking more and more often over recent years that our successive governments have been working against us - and even logic itself - in many of the decisions being made. Some beggar belief to the extent that I wonder whether the decisions are designed to maximise damage and stress. Indeed, more than once I've questioned exactly where the decision-makers are keeping their brains!
HMRC's proposals to fundamentally change the way VAT reductions are applied to household renewable technologies is a case in point. Currently, the 5% reduced rate applies to installations of solar and combined installations of solar and storage, but if implemented, the complicated new proposals will lead to the cost of an installation being charged at 20% VAT if the cost of materials exceeds 60% of the total cost of the installation. Those amongst us who've had a new kitchen or bathroom fitted, will know that unless we're able to afford the very best products and equipment, installation itself is easily the most expensive part...
Currently, most solar-only schemes comfortably fall below the 60% threshold. However, the most cost-effective collective purchase schemes (as well as more premium schemes such as those combined with more complex 'smart' technologies) are at risk. There's also a significant risk to installations altogether as the material costs will likely often breach the 60% threshold.
I applaud associations representing the smart power industry, who've penned a joint letter to Government, calling for the proposals to be scrapped or for the threshold for material costs to be raised to 85%.
I've always believed that our Governments should be doing all they can to encourage us to become as energy-efficient as possible, and that any refurbishment which improves energy efficiency should not only enjoy a reduced rate of VAT but should actually be VAT exempt. Like those petitioning Government, I feel that these HMRC proposals are particularly perverse when the Government has declared a climate emergency and is backing a smart energy system, which would see homes with storage helping to support the grid.
Whether you believe in man-made climate change or not, the way we're living isn't sustainable and people want to take action. Don't you agree that Government should be tearing down any barriers to climate support, rather than putting more up? Where are the ministers hiding their brains, I wonder...
16th May 2019