Customs has corrected a notice regarding the reduced rate of VAT on energy savings materials. Electric dual immersion water heaters with foam insulated water tanks are not energy saving materials which qualify for the reduced rate, as Customs incorrectly stated in its Budget notice 39/00.
Installation of electric dual immersion heaters are eligible for the reduced rate only if they are grant funded.
The reduced rate of VAT for energy savings materials was introduced from 1 April 2000. It reduces the rate from 17.5% to 5%, the lowest rate possible under current EU law.
[2000]