VAT removed on energy efficiency measures
VAT removed on energy efficiency measures Mar 28, 2022
On 23 March Chancellor Rishi Sunak
announced homeowners will not have to pay VAT on certain energy efficiency
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.”