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HMRC has clarified the rules on claiming VAT relief on the installation of electrical blinds in building projects.
Sara White, Editor, Accountancy Daily
The VAT relief does not apply to the installation of electrical blinds into new builds and renovations of houses, as they are not commonplace.
HMRC VAT Notice 708 confirms that regular roller blinds are considered as a standard product incorporated into construction projects and therefore they qualify for VAT relief (ie, they qualify for the zero or reduced rate of VAT if all the conditions are met). The treatment of manual roller blinds was settled after a First Tier Tribunal case concerning Wickford Development Co Ltd. As a result, in May 2021, HMRC agreed that VAT could be reclaimed on manual blinds.
It has taken HMRC two years to update the guidance since the Wickford decision.
VAT Notice 708 was not amended to this effect back in May 2021, but the new update confirms that this is the case.
However, as soon as an electric mechanism is used to operate the blind it ceases to qualify for VAT relief.
Sections 13.8.1 and 13.9 of Notice 708 have been updated to clarify that electrical blinds are not ordinarily incorporated in dwellings. Therefore, like other goods which do not qualify as building materials for VAT purposes, they are not eligible for VAT relief when supplied as part of a construction service and the ‘builders’ block’ prevents developers from recovering VAT incurred on them as input tax.
Other products included on the list, which do not qualify as building materials, include aga and similar range cookers, freestanding and integrated appliances such as cookers, fridges, freezers, dishwashers, microwaves and washing machines, as well as electrical components for garage doors and gates.
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