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The Reduced Rate of VAT on Domestic Repairs Notice of Extension to 31st January 2006 20 December 2005

    The Customs and Excise Division of the Treasury advises that as a final decision by the EU on the continuation of the derogation for labour-intensive services has been deferred, the Treasury Minister has today signed an Extra-Statutory Concession that extends availability of the 5% VAT rate in the Island until the end of January 2006.

    EU Finance Ministers are expected to reach a decision on the derogation at their meeting in January. However, in order to minimise any disruption and confusion, and by adopting the EU procedure of maintaining the status quo, until such time as a definitive decision is reached the Treasury has decided that it should maintain the reduced-rate regime.

    Whilst the Order that applied the reduced rate expires on 31st December, the Concession signed today ensures that the 5% rate will continue to apply to the same range of supplies and subject to the same conditions until at least 31st January 2006.

    If the EU fails to reach a decision in January the reduced rate may be extended by concession for a further period of time.

    A further press release will be issued following the meeting of the Finance Ministers.

    The Treasury and the Customs and Excise Division apologise for any inconvenience that the uncertainty has caused.

    For further information please contact the Customs and Excise Advice Centre on 648100 or by email on

    20th December 2005

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