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Zero VAT on Energy Saving Products - how does it work?

We are hoping to retrofit some insulation to the external walls and roof of an old existing extension. 
We are certain that this would qualify for the Zero VAT for energy saving products scheme bought in on 1st April 2022. However,  while the builders are doing this work we have asked them to install two velux windows and a wall window. This element of the job is not covered by the Zero VAT scheme. 

What we are trying to understand is whether the windows element of the job will mean we have to pay standard VAT on the whole job or whether the contractor can break down the job onto two parts, one invoice for the insulation work and a separate invoice for the window part of the job and charge zero VAT on the insulation and standard for the windows? 

Does any one have any experience with this that can advise. 

Thank you. 


Comments

  • Doozergirl
    Doozergirl Posts: 34,082 Forumite
    Part of the Furniture 10,000 Posts Name Dropper Photogenic
    edited 11 May 2022 at 9:28AM
    https://www.gov.uk/guidance/vat-on-energy-saving-materials-and-heating-equipment-notice-7086

    Para 2.7.4 relates to mixed supply.  Yours fits under this criteria for me and the whole job would be subject to standard rate VAT.  

    If you treat them as separate jobs at separate times, then the installation of energy saving materials would be zero rated and the windows standard rated.  

    There's no allowance for splitting it out on an invoice, like when you buy different rated goods from the supermarket or if I build a new zero rated house but supply skips or plant hire as part of it at standard rate.   Seems stupid to me, but there you go.  
    Everything that is supposed to be in heaven is already here on earth.
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