Self BuildersEnergy Efficient RetrofitDo Making-Good and Access Works Qualify for 0% VAT on a Retrofit?
It depends on the specific works and how they are described. HMRC Notice 708/6 recognises that some ancillary works — such as making good a wall surface after cavity wall insulation is installed — can form part of the qualifying ESM supply and attract the 0% rate, provided they are genuinely incidental to and necessary for the qualifying installation. However, works that are merely associated with the project generally — preparatory building works, structural alterations, separate groundworks — are not qualifying ESM and remain at 20%. The key test is whether the ancillary work is an integral part of the qualifying supply, or a separate supply of general building work.
On a £20,000 external wall insulation package, the making-good (re-rendering, redecorating) may add £3,000–£5,000. Whether that element follows the 0% ESM rate or attracts 20% depends on how the work is structured and described. Getting the classification wrong in either direction has VAT consequences — for the contractor's return and for the amount the homeowner pays.
Works required to complete the qualifying ESM installation — re-rendering a wall surface immediately after external insulation boards are fixed, for example — can form part of the qualifying supply where they are described and priced as part of the same ESM package rather than as a separate decorating or building contract.
Preparatory works that are not specific to the ESM installation — removing existing cladding, structural repairs, replacing windows before insulation is installed — are general building works at 20%. They do not qualify simply because they precede or accompany an ESM installation.
HMRC's guidance on ancillary works in the context of ESM installation is not exhaustive. Whether specific works qualify requires assessment of what those works actually are, how they are scoped and contracted, and whether they meet the test of being genuinely incidental and necessary to the qualifying supply. Uncertain cases should be referred for specialist VAT review.
VATBuild is not affiliated with HMRC. References to HMRC publications are for informational purposes. Always consult a qualified tax adviser before making decisions about VAT on your project.
VATBuild identifies ancillary works on retrofit invoices and checks whether the contractor has treated them as part of a qualifying ESM supply (0%) or as separate building works (20%). Where the classification is ambiguous — or where the invoice description does not allow a clear determination — it flags the line for review rather than making an assumption, with a reference to the relevant Notice 708/6 paragraph.