Solar panels are being installed on commercial premises (non residential) owned by a client. The installer has charged VAT at 5%; I thought this only applied to residential premises (see VAT Notice 708/6). I have also noted that they applied the same rate to an installation 3 years ago. Before I point this out to the client and start the whole hassle of obtaining correct invoices and arguing the toss with the supplier, can anybody confirm that I am right that it should be 20%? Let me know if more detail is required.
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Most commercial installations are standard 20% rated, however it is possible that the 5% charged is correct, if your client's premises is used for certain activities
you don't say what the premises are used for??
I wouldn't point it out to the client - what would be the benefit to him?
If it were the other way around, where the supplier was charging 20% instead of 5%, that would be different since HMRC could block recovery of the 15% incorrectly charged.
It depends on whether you think "incorrectly charged" means "charged when it shouldn't have been" or "charged at the wrong rate".
In my experience, when 20% has been charged instead of 5%, HMRC have disallowed only the 15% excess, suggesting that of the 20% 5% was correctly charged and 15% wasn't.
It's debatable, though.
A natural reading is that, if the correct rate is 5 and you are charged 20, then the 5 is correctly charged and the 15 not (and you have no right to deduct the 15); if the correct rate is 20 and you are charged 5, then none of what you pay was incorrectly charged. Which agrees with Wilson.