Andrew Needham looks at the recent budget changes to the VAT treatment of energy-saving materials.
The liability of energy-saving materials (EMTs) and the definition of what actually counts as EMTs has changed a lot with a tightening of the definition of what exactly was eligible, following an ECJ decision in 2015 ((C161/14) European Commission v United Kingdom).
The result was that the UK had to change the law and remove the 5% reduced rate of VAT from the installation of most energy-saving materials. Among the items affected were microcombi boilers, insulation and solar panels.
Too generous
This case was brought by the EU Commission, who viewed the UK and Ireland’s approach as overly generous. The ECJ agreed with the EU
