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Industry gets ready to grumble about VAT

The topic of VAT is proving to be an area of growing discussion for installers of heating systems.

Following the earlier increase to 20 per cent, a movement has been started to reduce VAT to 5 per cent for other heating options.

Peter Thom, Green Heat managing director, told H&V News he is still waiting for a reply to a letter sent to Chancellor of the Exchequer George Osborne last month.

This requested his support for the reduction of VAT on professionally installed domestic central heating boilers and passive flue heat recovery.

Mr Thom said there is currently an anomaly as professionally installed heating controls, insulation, solar panels and heat pumps are at the lower rate of 5 per cent.

The boiler is at the higher rate of 20 per cent, even though this will save the most amount of energy and carbon.

Flue heat recovery is also blighted with this higher rate, said Mr Thom.

Following the HMRC response to APHC and SNIPEF, reducing the VAT rate to 5 per cent would also avoid the confusion currently experienced by installers in applying the correct rate to invoices.

Mr Thom proposes a reduction to be introduced immediately to run for two years and then reviewed when the Green Deal is introduced in September 2012.

This will also help the industry to overcome problems currently faced, including the economy, cutbacks and the recent increase in VAT, all of which have affected consumer spending and confidence.

Mr Thom has launched at petition at www.grumble.org.uk and is inviting industry personnel to add their support.

“We are getting great support for this including trade associations BEAMA & HHIC, and professional bodies including IDHEE,” Mr Thom told H&V News.

He also said positive response had been received from manufacturers including Baxi, Alpha, Zenex, Worcester, Vaillant, Ideal and Ravenheat.

“I would not expect anyone in the industry would not support this, apart from those installers that may not be VAT registered.

“We need to apply some pressure on the Government to take some supportive action to help our industry. We need bread today, not promises of jam tomorrow.”