On 24^th March, HMRC released a policy paper confirming that the Prime Minister has secured agreements with other officials at the March European Council to welcome increased flexibility for member states in relation to the zero and reduced rates of VAT. Whilst this was primarily related to the abolition of the ‘tampon tax’ – the increased flexibility could present an opportunity for the UK to reconsider other demands – like the ECJ ruling which suggested that the reduced rate on energy saving materials was in breach of EU laws.

The recent finance bill did not, as anticipated, include the ruling which increased the VAT rate on such materials from 5% to 20%. It remains unclear as to whether the plans have been delayed, or disregarded completely – but it certainly provides potential for the reduced rating on energy saving materials to remain in place.