Energy-saving materials installation VAT relief
Zero VAT on qualifying insulation, solar panels, heat pumps and other energy-saving installations in UK residential accommodation and qualifying charity buildings.
Ez a lehetőség jelenleg angolul érhető el.
The relief lowers the VAT charged on qualifying installation work. It also covers the materials when the same business supplies and installs them. If you buy materials yourself, the retailer charges standard VAT, but the separate qualifying installation service can receive relief.
Qualifying installations include central-heating and hot-water controls, draught stripping, insulation, solar panels, wind and water turbines, ground and air source heat pumps, micro combined heat and power units that produce heat, hot water and electricity, and boilers designed to burn only wood, straw or similar plant material. From 1 February 2024, the list also includes water source heat pumps, electrical storage batteries and smart diverters, which send locally generated electricity to appliances. Batteries can store grid electricity, locally generated electricity, or both; standalone and retrofit installations qualify.
From 1 February 2024, necessary groundworks or dredging to install pipework or equipment for a ground or water source heat pump also qualify. Installing a central-heating system whose principal equipment is an air, ground or water source heat pump can be a single zero-rated supply.
The UK zero-rate period runs from 1 May 2023 to 31 March 2027. From 1 April 2027, the rate returns to 5%. Earlier residential installations had different rules: the 5% period ended on 31 March 2022 in England, Scotland and Wales, and on 30 April 2023 in Northern Ireland; those earlier rules included social-policy conditions or a materials-cost threshold. Charity buildings and the additional measures above entered the present relief on 1 February 2024.
Eligibility
- Qualifying residential accommodation and, from 1 February 2024, buildings intended solely for a relevant charitable purpose are eligible locations. Qualifying work need not all be indoors: solar panels can be installed on the building’s site, and necessary groundworks or dredging for ground or water source heat pumps can take place on its surrounding grounds. Qualifying residential accommodation includes houses and flats, armed-forces accommodation, children’s homes, care homes, hospices, institutions where at least 90% of residents have their sole or main residence, religious residential communities, student accommodation and self-catering holiday accommodation.
- Permanently inhabited caravans qualify. Houseboats qualify if designed or adapted for permanent habitation with no self-propulsion; other boats can qualify where they are the owner’s sole or main residence and the owner pays Council Tax or domestic rates.
- For the charity branch, the building must be intended solely for either or both of two uses by a charity: activities outside the course or furtherance of a business, or use as a village hall or similar social or recreational facility for a local community. The village-hall or community-facility alternative is a separate route.
- The non-business route uses the VAT meaning of business. An activity can count as business even when it benefits the community and serves charitable aims. Charity shops, membership benefits supplied in return for subscriptions, and admission charged to enter premises are business activities. See HMRC’s explanation of the charity VAT business test.
- For either charity route, the installer must take reasonable steps to check the intended use and retain supporting documentation. A confirmation letter can be used; a special certificate is not required.
- Materials generally must be fixed permanently in place; loft insulation can simply be unrolled and positioned. Air source heat pumps must be permanently fixed rather than portable or moveable.
- Hospitals, prisons, hotels, inns and similar establishments do not qualify under the residential branch. Double or secondary glazing, low-emissivity glass, ordinary energy-efficient boilers and fridge freezers are outside this relief. Curtains and carpets do not qualify as insulation. Multi-fuel or dual-fuel boilers, standalone wood-burning stoves and construction or conversion of fuel stores are also excluded.
- Combining qualifying equipment with other building work can change the VAT treatment. The installer must assess whether the contract is one supply or several independent supplies. Insulation included in building an extension forms part of the standard-rated construction supply; necessary ancillary work, such as cutting a loft hatch solely to install insulation, can qualify with the installation.
How to apply
- Állapot
- lezárul 2027. márc. 31.
- Megnyílik
- Lezárul
- Az adott pályázati kör feltételei
- These dates govern supplies qualifying for the temporary zero VAT rate, rather than a grant application deadline. Charity buildings, water source heat pumps, electrical storage batteries, smart diverters and qualifying groundworks or dredging are covered from 1 February 2024. From 1 April 2027, qualifying installations revert to 5% VAT.[^c1][^c5]
Employ an installer to install qualifying equipment, either supplied by that business or bought separately by you. The installing business applies the VAT treatment to its supply using HMRC’s VAT Notice 708/6. For a charity building, provide evidence of its intended qualifying use so the installer can retain the necessary documentation.
The separate 5% relief for grant-funded conventional heating equipment in section 3 of the notice has its own conditions. It is outside this energy-saving-materials offer.