The Glass and Glazing Federation (GGF) has issued a response to the HM Revenues and Customs (HMRC) Consultation on “changes to the reduced rate of VAT for energy saving materials” published on 9th December 2015.
The GGF’s response outlines concerns regarding the absence of energy efficient glazing in the list of energy saving materials for the reduced rate of 5% VAT.
It has also urged the Government to lower its reduced rates in line with the provisions of the European Directive which permits EU countries to apply reduced rates for “provision, construction, renovation and alteration of housing, as part of a social policy.”
Giles Willson, GGF Managing Director commented: “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.”
According to a Palmer Research Report in 2014, the primary reason for replacing windows and doors is now for improving energy efficiency.
Taking this into consideration, GGF provided HMRC with a list of proposals to include in any forthcoming changes to VAT on energy saving materials, including a provision for energy saving materials being used to make properties energy efficient.
The GGF estimates a growth of 20% in the sector if 5% VAT is awarded. This would be a significant boost for the sector, which has been in steady decline since 2002.
Should the VAT rate be reduced, the GGF has offered to work with the Government to establish suitable guidance and training for the sector to implement change within the short timescale and to avoid any confusion in a sometimes complex supply chain.
Giles Willson concluded, “We have collaborated for the last six weeks with our Members, other industry bodies and GK Strategy our political advisors before submitting this response. 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.”
Any changes to the Government’s VAT policy are likely to be released in the summer, with any changes being included in the Finance Act in Autumn 2016.
Glass and Glazing Federation
40 Rushworth Street
t: 0207 939 9101
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