If you are VAT registered, you obliged to charge VAT when you make taxable supplies.


Most goods and services are charged at the standard rate of VAT.  However certain categories of goods and services are subject to different rates of VAT – See the table below for guidance.  This sets out a list of goods and services showing which rates of VAT apply and which items are exempt or outside the scope of VAT. Detailed guidance can be obtained from the Government website or your account.

Rate % of VAT What the rate applies to
Standard20%Most goods and services
Reduced Rate5%Some goods and services, e.g. children’s car seats and home energy saving materials
Zero Rate0%Zero-rated goods and services, e.g. most food and children’s clothes

What qualifies and the VAT rate you charge depends on the type of goods or services you provide.  This is fully set out in a complex legislation known as the VAT Act 1994 – Schedules 7A, 8 and 9.

Reduced or zero rates of VAT were introduced for a myriad of reasons but primarily for providing relief and incentives to certain sectors of the economy.  However increasingly business owners are finding that the HMRC’s decisions and assessments are commonly being applied in such a way as to effectively deny these reliefs.  This can often result in unfair decisions which are applied unevenly with companies finding that they are no longer on a level playing field with their others in their sector or industry.


Disputes on VAT on Energy-saving Supplies

One of such areas where we are seeing a rise in client complaints is in the area of reduces rates of VAT on supplies of energy saving supplies.

As a VAT registered business you may be entitled to charge a reduced rate of 5% for:

  • controls for central heating and hot water systems
  • draught insulation, e.g. around windows and doors
  • insulation on walls, floors, ceilings, lofts, etc.
  • solar panels
  • wind turbines
  • water turbines
  • ground-source heat pumps
  • air-source heat pumps
  • micro combined heat and power units
  • wood-fuelled boilers

However more and more clients are coming to us with complaints of unfair assessments by HMRC – View our recently reported case here.

We can Help:

These decisions can be challenged.  However, managing tax & commercial disputes requires not only an understanding of the technical aspect of the issues involved but also of the process and steps which can be taken to resolve such a dispute as effectively and efficiently as possible.  We will carefully review the facts and circumstances surrounding the adverse decision or assessment and will advise if we disagree with the decision of HMRC. Thereafter we will discuss with you what next steps are recommended which could include appealing the decision, if consider other methods of dispute resolution are not most suited to your case.

If you have been affected by any of the issues above or other tax related issue and require assistance, you might want to speak to us today.


With our Head Office based in Hull and two Consulting Offices in London and Leeds we are easily accessible for consultations. Call us on 01482 616 616 or 0800 037 1305 to book a free telephone consultation to discuss your issues and requirements.

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