VENSAV3240 - Energy-saving materials: carving out energy-saving materials from a single supply

It is not permissible to separately identify elements of a single supply that would, if supplied on their own, qualify as the installation of energy-saving materials and apply the reduced rate. The VAT treatment of the installation of energy-saving materials is subject to the normal VAT rules concerning single and multiple supplies as described earlier.This was confirmed by the Upper Tribunal in AN Checker [2018] UKUT 0292 (TCC).  This case considered whether the installation of certain energy-saving materials alongside the installation of boilers was a single taxable supply or whether the installations should be taxed at different rates (boilers at the standard rate and energy-saving materials at the reduced rate). The Upper Tribunal confirmed that the approach was first to identify the nature of the supply before determining whether it fell within Group 2 of Schedule 7A. Since the nature of the supply fell to be a single supply of installing a boiler (with ancillary supplies of energy-saving materials) it was standard rated and it was not permissible to carve out the energy-saving material components of that single supply and apply the reduced rate to that element.