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<p>Although the standard rate of VAT of 20% applies on energy saving materials, the
Government allows a reduced rate of 5% of VAT on:</p><p> </p><p>- all installations
of energy saving materials for recipients who are aged 60 or over or on certain benefits,
for housing associations, and where the installations are in buildings used for relevant
residential purposes, and;</p><p> </p><p>- on all other installations of energy saving
materials in residential accommodation where the cost of the materials does not exceed
60% of the total cost of the installation.</p><p> </p><p>It should be noted that if
the value of the energy-saving materials exceeds 60%, then only the labour cost element
will qualify for the reduced rate (with the supply of the materials being taxed at
the standard rate).</p>
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