Damp-proofing products are to be standard rated

HMRC has confirmed in Revenue and Customs Brief 9/2018 that it does not regard damp-proofing products such as paints creams or gels as energy-saving materials that qualify for the reduced rate of VAT.

As a result from 1 September businesses must account for standard-rate VAT on all sales and applications of these products.

HMRC had become aware that some businesses were marketing damp-proofing products as energy saving. Further the First-tier Tribunal in Safeguard Europe Ltd decided that one such product qualified as such. HMRC has since concluded they do not qualify because:

• their dominant purpose is to water-proof exterior walls rather than improve thermal efficiency;
• there is no conclusive evidence that they improve the thermal efficiency of brickwork;
• the products are not normally described as insulators;
• the products are...