Member Article

EU VAT ruling impacts Flowgroup

Chester-based Flowgroup, the installer and manufacturer of alternative and efficient energy products, has announced a cost reduction programme for its boilers.

A new EU ruling has decided that the UK’s reduced 5% VAT rate for energy-saving products is in breach of EU laws.

This means that VAT will be at the normal rate of 20% on Flowgroup’s boilers, increasing the cost of installation.

With this in mind the group has revised its numbers and estimates that less boilers will be installed, it has also embarked on a cost reduction programme to mitigate for the cost increase.

CEO of Flowgroup, Tony Stiff, said: “Clearly this is a short term blow to Flowgroup and the UK’s Green energy plan and we now have to wait to see how the Government will interpret this and how they will react.

“That said, we are confident that the Government will still seek to promote energy efficient products and we still expect that Flow customers will benefit from this.

“The long term expectation of a successful roll out of our technology remains unchanged, but it is clear that launching during a time when consumers might have to pay over £500 more for the Flow boiler and see installation costs rise by 15% would be inconsistent with our initial roll out plans.

“The EU ruling has no impact on our plans to develop and launch a combination version of the Flow boiler in-line with our timescale. We remain on track to deliver this additional product as an extension of our range.”

This was posted in Bdaily's Members' News section by Sophia Taha .