The European Court have ruled that the UK blanket reduced VAT rate for energy saving materials is unlawful. The UK government are likely to make restrictions to the reduced VAT rate rules in Finance Act 2016. We don’t have further details yet. Clearly if you are thinking of buying (or if you currently sell) reduced rate VAT energy saving materials, including solar panels, it may make sense to act now. Some materials and situations are likely to have their VAT rate increased from 5% to 20%, possibly as part of the 16 March 2016 budget.