Central controls for lighting have been added to the list of ‘ordinarily’ incorporated items in dwellings. That means that the technology will be eligible for a reduced rate of VAT in scenarios such as new builds or conversions from non-domestic to domestic dwellings.
An August update to VAT Notice 708 (Building and Construction) from HMRC, which was not announced with any fanfare or publicity, confirms that central controls for light, heat and ventilation are regarded as: “examples of articles ‘ordinarily’ incorporated in dwellings”.It goes on to say that: “Intelligent lighting systems are also accepted but not the accompanying remote control handsets”.
A Focus SB control panel
VAT expert Dave Brown, who specialises in VAT issues surrounding property upgrades, told Lighting: “Over the last ten years HMRC have embraced new technology in the way that ostriches have embraced sand and anything beyond a simple switch has been deemed liable to VAT. Their view has been influenced by the fact that an ‘intelligent lighting/heating system’ would not normally be installed in the average new house. Within the last few weeks, however, HMRC have at last reached the real world.”
The changes to the HMRC guidance will provide controls manufacturers and lighting designers with an opportunity to make lighting control systems much more common in the domestic sector. The construction industry has long argued that all energy efficient upgrades to existing buildings should be subject to zero VAT.
Domestic lighting designer Melanie Shaw from Brilliant Lighting will write about the implications of the changes to VAT Notice 708 in the October issue of Lighting.
