VALUE ADDED TAX 1 This Order may be cited as the Value Added Tax (Reduced Rate) Order 2002 and comes into force on 1st June 2002. 2 Schedule 7A to the Value Added Tax Act 1994 is amended in accordance with the following provisions of this Order. 3 In Group 3— a after item 8 insert— 8A Supplies to a qualifying person of services of installing, maintaining or repairing a renewable source heating system in the qualifying person’s sole or main residence. 8B Supplies of goods made to a qualifying person by a person installing, maintaining or repairing a renewable source heating system in the qualifying person’s sole or main residence, being goods whose installation is necessary for the installation, maintenance or repair of the system. ; b in paragraph 1 (1) of the Notes for “items 1 to 7, 9 and 10” substitute “items 1 to 7 and 8A to 10”; c in paragraph 4(d) of the Notes for “foam-insulated” substitute “factory-insulated”; and d after paragraph 4 of the Notes insert— Meaning of “central heating system” 4A For the purposes of items 5 to 8 “central heating system” includes a system which generates electricity. Meaning of “renewable source heating system” 4B For the purposes of items 8A and 8B “renewable source heating system” means a space or water heating system which uses energy from— a renewable sources, including solar, wind and hydroelectric power, or b near renewable resources, including ground and air heat. . 4 In Group 6— a in paragraph 4(2) of the Notes— i at the end of paragraph (a) omit “and”, and ii after paragraph (a) insert— aa that is not to any extent used for a relevant residential purpose, and ; b for paragraph 5(2)(a) of the Notes substitute— a before the conversion the premises being converted do not contain any multiple occupancy dwellings, ; c in paragraph 7 of the Notes— i for sub-paragraph (2) substitute— 2 The first condition is that— a the use to which the premises being converted were last put before the conversion was not to any extent use for a relevant residential purpose, and b those premises are intended to be used solely for a relevant residential purpose after the conversion. , ii omit sub-paragraphs (3), (4) and (5), and iii in sub-paragraph (6)— a for “fourth” substitute “second”, and b after “relevant residential purpose” insert “for which the premises are intended to be used”. 5 In Group 7— a change the title of the Group to “RESIDENTIAL RENOVATIONS AND ALTERATIONS”; b in each of items 1 and 2 for “a single household dwelling” substitute “qualifying residential premises”; c in paragraph (b) of item 2 for “the dwelling concerned or its immediate site” substitute “the premises concerned or their immediate site”; d for paragraph 2 of the Notes, substitute— Meaning of “alteration” and “qualifying residential premises” 2 1 For the purposes of this Group— “alteration” includes extension; “qualifying residential premises” means— a single household dwelling, a multiple occupancy dwelling, or a building, or part of a building, which, when it was last lived in, was used for a relevant residential purpose. 2 Where a building, when it was last lived in, formed part of a relevant residential unit then, to the extent that it would not be so regarded otherwise, the building shall be treated as having been used for a relevant residential purpose. 3 A building forms part of a relevant residential unit at any time when— a it is one of a number of buildings on the same site, and b the buildings are used together as a unit for a relevant residential purpose. 4 The following expressions have the same meaning in this Group as they have in Group 6— “multiple occupancy dwelling” (paragraph 4(2) of the Notes to that Group); “single household dwelling” (paragraph 4(1) of the Notes); “use for a relevant residential purpose” (paragraph 6 of the Notes). ; e in paragraph 3 of the Notes— i in the heading, for “dwelling has” substitute “premises have”, ii for sub-paragraph (1) substitute— 1 Item 1 or 2 does not apply to a supply unless— a the first empty home condition is satisfied, or b if the premises are a single household dwelling, either of the empty home conditions is satisfied. , iii for sub-paragraph (2) substitute 2 The first “empty home condition” is that neither— a the premises concerned, nor b where those premises are a building, or part of a building, which, when it was last lived in, formed part of a relevant residential unit, any of the other buildings that formed part of the unit, have been lived in during the period of 3 years ending with the commencement of the relevant works. , and iv in sub-paragraph (4)(b) for “the dwelling concerned or its immediate site” substitute “the premises concerned or their immediate site”; f after paragraph 3 of the Notes insert— Items 1 and 2 apply to related garage works 3A 1 For the purposes of this Group a renovation or alteration of any premises includes any garage works related to the renovation or alteration. 2 In this paragraph “garage works” means— a the construction of a garage, b the conversion of a building, or of a part of a building, that results in a garage, or c the renovation or alteration of a garage. 3 For the purposes of sub-paragraph (1), garage works are “related” to a renovation or alteration if— a they are carried out at the same time as the renovation or alteration of the premises concerned, and b the garage is intended to be occupied with the premises. ; g after paragraph 4 of the Notes insert— Items 1 and 2 only apply if building used for relevant residential purpose is subsequently used solely for that purpose 4A 1 Item 1 or 2 does not apply to a supply if the premises in question are a building, or part of a building, which, when it was last lived in, was used for a relevant residential purpose unless— a the building or part is intended to be used solely for such a purpose after the renovation or alteration, and b before the supply is made the person to whom it is made has given to the person making it a certificate stating that intention. 2 Where a number of buildings on the same site are— a renovated or altered at the same time, and b intended to be used together as a unit solely for a relevant residential purpose, then each of those buildings, to the extent that it would not be so regarded otherwise, shall be treated as intended for use solely for a relevant residential purpose. ; and h in paragraph 5 of the Notes for “dwelling” substitute “premises” in each place where that word occurs. Tony McNulty Anne McGuire Two of the Lord’s Commissioners of Her Majesty’s Treasury 17th April 2002