​VAT removed on energy efficiency measures Mar 28, 2022

 VAT on some energy efficiency measures

On 23 March Chancellor Rishi Sunak announced homeowners will not have to pay VAT on certain energy efficiency measures.

Whilst previously charged at 5%, solar panels, heat pumps and insulation are not subject to VAT.

This is all part of the Government's incentive to get homeowners to install environmentally friendly systems and this relief could be in place for the next five years.

However the impact of this may be limited due to many people having energy saving materials installed at the same time as wider heating measures and that would mean they are subject to the full 20% VAT.

Rishi Sunak said:

“We know that energy efficiency will make a big difference to bills. But, if homeowners want to install energy-saving materials, at the moment, only some items qualify for a 5% VAT relief and there are complex rules about who is eligible.”

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