Re upgrading houses rather than building new ones (Letters, 18 October), in a Covid lockdown-induced fit of enthusiasm, we decided to retrofit our 1920s house to the Passivhaus Institute’s new EnerPHit standard. Thanks to an exceptionally dedicated builder, we’ve been able to hit the full Passivhaus energy standards.
If we’d knocked our house down and built a new one, the whole build would have been zero-rated for VAT. But for retrofit, the VAT regime is very different. For example, a few specific energy-saving materials are exempt, but the cost of the significant labour needed to achieve airtightness isn’t. And you might be able to claim VAT offset if you’re upgrading the roof only to improve its energy efficiency, but any other contributory reason is likely to mean the whole work is VAT-able. And the onus of proof is on the contractor. Luckily we found one of the few who enjoys this sort of challenge.
Why not make the process target-based, with VAT exemption if measurable energy efficiency targets are hit? Such a system might also incentivise the trade to take construction detail more seriously.
Deborah Henderson
Oxford
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