Following the judgment of the European Court (CJEU) in Commission v United Kingdom (C-161/14), in which it was held that the UK’s existing legislation was not consistent with EU law, the government intends to amend the relevant legislation in Finance Bill 2016.

On 9 December 2015, HMRC published a discussion paper seeking views on the proposed changes to reduced rate of VAT for the installation of energy saving materials. The government intends to retain as much of the relief as possible whilst ensuring that UK law is fully compliant with EU law.

Taxpayers who supply and/or install energy saving materials are invited to comment on the proposed legislative changes and whether the implementation date will cause any difficulties.

Written responses should be submitted and received no later than 3 February 2016.

A copy of the consultation is available to view here.