Intelligent lighting control systems and VAT

We’ve had a useful update from Dave Brown, a VAT Consultant we’ve worked with over a number of years. He’s drawn our attention to Notice 708, an August 2014 update from HMRC. Sub paragraph 13.8.1 has been amended to include central controls for light, heat and ventilation as examples of articles ‘ordinarily’ incorporated in dwellings. Intelligent lighting systems are also accepted but not the accompanying remote control handsets.

Intelligent lighting systems can be zero-rated for VAT purposes

So that’s confirmation that in new build scenarios or in a listed building scenario (where someone applied for Consent prior to March 2012), intelligent Lighting Control systems can be zero-rated for VAT.  Which is both sensible and good news. Dave also re-enforces the point about physical incorporation.  Physical incorporation means the lighting controls need to be physically attached to the building. From paragraph 13.3: “What Incorporated Means”, An article is ‘incorporated’ in a building (or its site) when it is fixed in such a way that its fixing or removal would either: – require the use of tools – result in either the need for remedial work to the fabric of the building (or its site), or substantial damage to the goods themselves. 

So although it’s rare to see, just make sure your lighting control elements aren’t in a free-standing rack.  To qualify as physically incorporated, lighting control systems need to be screwed to the wall. It’s a welcome development. Lighting control is a sensible addition to a new build and zero-rating for VAT purposes might encourage take-up.

External links

Dave Brown VAT Consultancy – a wealth of knowledge and experience on VAT and property and all-round good chap.
HMRC: Notice 708 (August 2014)

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