In a judgement issued last month, the CJEU has ruled that the UK cannot apply a reduced rate of VAT to the supply and installation of energy-saving materials to all housing, as the reduced rate is applicable to social housing only.

Infringement proceedings were brought against the UK by the Commission, which maintained that the UK failed to comply with the VAT Directive and that a reduced rate of VAT can be applied only to supplies of goods and services specified in Annex III to the directive. The Commission claimed that the UK breached EU VAT law by applying the reduced rate to all housing. This view was upheld by the CJEU.