VAT legislation is complex and the application of the standard or the reduced rate of VAT to the supply of both materials and cost of services in relation to the installation of materials for a central heating system and/or other energy saving measures, varies depending on what is being supplied, to whom it is being supplied, where it is being supplied and under what circumstances e.g. grant funded.
Furthermore, whether any VAT incurred by an organisation (Local Authority (LA) or Registered Social Landlord (RSL)) in relation to the installation costs for a central heating system installation or energy saving measures can be recovered will depend on the VAT status of any particular organisation.
The VAT rates to be applied to goods and services to be provided as part of home energy projects are determined by HMRC. Whether VAT incurred by an organisation in such a project can be recovered from HMRC, would again be determined by HMRC.
AWS and the WHF team cannot (and do not hold themselves out to be able to), provide any guidance to bidders on either the VAT rates that would be applicable to goods and services to be provided as part of a home energy project; or the recoverability (from HMRC) of any such VAT cost incurred. In all instances, any queries by bidders should be addressed to their local HMRC VAT officers. The VAT helpline number is 0300 200 3700.
As set out in our guidance document all costs included in the funding application should be stated net of VAT. Where VAT is irrecoverable from HMRC and the bidder wishes to recover the cost from WHF funds, this amount should be captured separately within the application. In relation to funds requested from WHF, at our sole discretion, we will decide whether the bidder is entitled to recover such costs through the Fund. These circumstances will be limited to successful Local Authority bidders who are funding the installation of central heating and other qualifying measures to private homes.
Where funding is requested by a Local Authority to meet costs associated with the installation of measures in private households we require the irrecoverable VAT to be disclosed separately.