Heating, Ventilating & Plumbing
Industry urges government to Cut the VAT
Published:  06 April, 2011

Baxi is supporting an industry campaign - Cut the VAT - urging the government to reduce the rate of VAT charged on high-efficiency boiler installations and passive flue heat recovery systems.

Boilers are currently subject to the full 20%, but other energy-saving equipment such as controls, insulation, combined heat and power systems, biomass boilers, heat pumps and solar panels attract a special lower rate of 5%.

The reduced rate applies to energy-efficient installations in all residential properties and commercial buildings used by charities. Installations of these systems in newbuilds are zero VAT-rated.

Baxi believes a temporary cut until the Green Deal scheme – which comes into effect in October 2012 – would help the industry bridge a potentially difficult funding gap.

"The beauty of giving a quick boost to boilers is that the government will see immediate results," said Sarah Brook, marketing director of Baxi.

"Gas consumption and carbon emissions will fall; householders will enjoy smaller bills and many jobs in the heating sector will be preserved. And it could boost UK manufacturing as most domestic boilers sold here are also made here."

The HVCA is also backing the campaign and its head of sustainability David Frise said cutting the VAT could be a well-timed move. "With rising inflation and increasing global uncertainty about energy prices, this would send a strong signal from the government that the best investment you can make at the moment is in energy efficiency."

To sign up to the Cut the VAT campaign, visit www.grumble.org.uk.