Reduced rate VAT

Installing insulation should only be charged at the reduced rate (5%, check the HMRC website for the full list of conditions). I've just had some insulation installed and had to point this out to the installer (the installer is very reputable and did a good job). Has this been an area which has been abused previously making installers reluctant to use it or is it not widely known?

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  • JasonLVCJasonLVC Forumite
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    I'd have expected a reputable installer to be aware of the reduced VAT rate and to have charged the 5% for installation of it.

    A small, one-man general builder may not be aware and may need it pointing out to them though.

    If the installer has charged 20% VAT then this at least suggests that they've paid this 20% over to HMRC and so whilst the customer may be being over-charged, it would be difficult for the installer to pocket the difference (15%).

    Its not an area open to abuse imho, becuase the VAT treatment is a matter of fact - your installing insulation therefore it is reduced rated, there's no grey area as to whether the work you're doing could be something else so little scope for abusing that.
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