Prices and VAT

The demand and cost of wood products have seen a significant increase over the last 12 months. The biomass industry has been buying up much of the wood previously sent for firewood. This has forced up the price of wood, both standing and at roadside. The additional costs of transportation through road fuel and wages have also had an impact, meaning that despite absorbing much of these increases retail firewood prices are having to see a rise this season. These costs are of course all subject to VAT.

Firewood attracts VAT, although at a reduced rate providing it is supplied for domestic use. The following is an extract from HRMC.

Supplies of fuel and power for genuine domestic use are eligible for the reduced rate. The provider must be certain that the supply is to a dwelling or certain types of residential accommodation. Examples of allowed residential accommodation are:

  • armed forces residential accommodation
  • caravans
  • children’s homes
  • homes providing care for – (a) the elderly or disabled(b) people with a past or present dependence on alcohol or drugs(c) people with a past or present mental disorder
  • houseboats
  • houses, flats or other dwellings
  • hospices
  • institutions that are the sole or main residence of at least 90% of their residents
  • monasteries, nunneries and similar religious communities
  • school and university residential accommodation for students or pupils
  • self catering holiday accommodation

The present VAT rate for domestic firewood is 5%.

Firewood bought for wholesale use attracts the standard rate of VAT, currently 20%.