Major new incentive for energy efficient lighting control

Household Automation has been vigorously campaigning over the past few years to gain 0% VAT rating for lighting control in new build properties. MD of Household Automation Ltd; Andy Ellis reports…

This month HMRC have published Notice 708: Buildings and Construction – August 2014. For the first time intelligent lighting (not including remote control hand sets) has been recognised as ‘ordinarily incorporated in a building”.

What does this mean in reality? – New build properties can now have intelligent lighting , heating and air-conditioning systems installed at 0% VAT.

As the managing director of a progressive home automation company, I have long been campaigning for intelligent systems to be zero rated. ┬áBecause we deal with a variety of different equipment, it has always been difficult to segregate what is 0% VAT rated. With the issuing of the Notice 708 ( specifically section 13.8 “Examples of articles normally incorporated in a building” and 13.8.1 “Dwellings” ) things have become far clearer.

My interpretation is now that any part, of any intelligent BUS system used for lighting or heating that is part of a fixed installation can be zero rated for VAT in a new build property.

So as well as the standard components of lighting such as switches and dimmers, items such as in wall room controllers and touch screens can be included. With a comprehensive BUS set up (such as KNX) this in effect means that pretty much the whole system can be zero rated including light fitments and outside lighting.

With major building construction companies now having to seriously consider a proper technology infrastructure within their properties the zero rating of intelligent control will surely be a major incentive to specify intelligent systems.

6 thoughts on “Major new incentive for energy efficient lighting control”

        1. Yes we have spoken to them BUT if you do have any grey areas then you need to get it in writing. HMRC do have a written enquiries team:

          HM Revenue & Customs
          VAT Written Enquiries Team
          4th Floor, Alexander House
          Victoria Avenue
          SS99 1BD

          You have to interpret the notice 708 as you see fit. If in doubt get it in writing. As I have said in the blog my interpretation is that a bus system such as KNX including lighting and heating control and a fixed in wall touchscreen is certainly included within the 0% rating.

          Over the years we have made many representation on the 0% VAT rating subject and the recent rulings within the August update answer most (but not all) of our questions. Its a significant step forward and although there are always different interpretations of documentation the principle has now been set.

          1. If I have sold lighting control goods with standard rate VAT in June & July on a qualifying project, can I apply the zero rating retrospectively? eg Raise a credit note to the original lighting control invoice at 20% and invoice the goods to my client at zero%.

          2. Hello Sarah, my take on this would be that you couldn’t do it as the notice was released in August. I would strongly suggest speaking to HMRC in order to clarify whether it can be backdated.

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