VAT percentage query: 5% rate

[Ecohome01]

We currently sub-contract work out for energy saving measures. We have been asked by our customer to raise our invoices @ 5% VAT due to the below definition from HMRC.

"Heating equipment and connection of gas supply (to the extent they are grant-funded by certain funders to people aged over 60 or who are in receipt of certain benefits)"

Just a bit unsure as to whether we should be asking our sub-contractor to reduce the VAT rate to 5% for those specific jobs when invoicing ourselves, otherwise we would be reclaiming 20% VAT on a job which we only received 5%.

 

[lesvatadvice]

A sub-contractor does not make a supply to the" qualifying person," so they must charge VAT at 20%. You are the person supplying the energy saving materials, therefore you charge VAT at 5%.
Therefore, you do claim VAT at 20%, and only charge it at 5%.
HMRC Leaflet 708-6, chapter 3 explains this.
And do retain this reply in your VAT file for future reference.

 

[Ecohome01]

Thanks for the advice, much appreciated.