Scaffolding and Installation of Solar Panels VAT

Scaffolding and Installation of Solar Panels VAT

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A scaffolding company is providing a supply, erection and dismantling service to a solar panel installer working on residential properties.

I understand that solar panel installation is within CIS and that supply/fit is currently zero rated.

HMRC reverse charge technical guidance says 'The reverse charge does not apply if the scaffolding is supplied for a zero-rated construction project' under 'Scaffolding on zero-rated new build housing' so VAT would be due at 20% on the hire element with labour being zero rated.

Under 'Scaffolding for standard or reduced rated construction projects' HMRC say that this should be acounted for under the reverse charge.

Is the scaffolder's supply zero rated so VAT is due on the hire element or does it fall within reverse charge?

 

 

 

 

 

 

Replies (3)

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Danny Kent
By Viciuno
12th Feb 2024 14:43

Think you are looking at the wrong guidance. You need to look at the guidance for zero-rating the supply rather than the reverse charge guidance.

You need to start off by determining if the works undertaken by the scaffolding company are zero rated as part of a supply of the solar panels. Gut feeling is no as the scaffolding Co isn't supplying or installing the energy saving materials, but as with everything VAT related I'd be checking the guidance first:

https://www.gov.uk/guidance/vat-on-energy-saving-materials-and-heating-e...

If no then DRC with CIS.

If yes, then no DRC (as zero rated) but CIS should still be operated.

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By rmillaree
12th Feb 2024 14:47

ignore cis and first work out whether the supply is zero rated or standard rated or reduced rated which is it ?

If its zero rated then there will be no reverse charge needed normally as there is nothing to reverse charge.

note dont presume just because your clients customers work is zero rated that your clients work will be zero rated to their customer - it might be and that may extend to probably is but the golden rule is you need to know what the rules say with regard to te supply you are undertaking - the quoted guidance confirms the obvious possibility for confusion here with regard to vat and scaffolding. I am not convinced you have posted anything like enough info for the vat treatment to be obvious - heyho it might be simpler than i am worried it may not be. Must admit this exact question make my brain go - oh dear.

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By Elgin
16th Feb 2024 11:51

From HMRC customer forums:

Posted 9 months ago by ElectricianInOxfordshire

Seeking clarification on 0% vat for scaffold. Contractor is supplying and installing solar panels on residential property. Scaffold is needed to access the roof. The scaffold will not be used for any other work. Does the quote to the customer (which includes the cost of the scaffold) get charged fully at 0% VAT or does the scaffold need to be invoiced separately with 20% VAT added?

Posted 9 months ago by HMRC Admin 19

Hi ElectricianInOxforshire,

The 0% VAT rate only applies to the installation of energy saving materials and would not apply to the scaffolding as these are not in themselves energy saving materials and so the scaffold service would need to be invoiced at 20%.

This is from a fairly long thread 'Zero rate of VAT for solar panel products' illustrating lots of confusion........

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