0% Vat
What is the scheme?
The government are currently offering a 0% VAT tax rate on energy saving materials (ESM). This is part of an initiative to encourage energy efficiency improvements. This rate will revert back to 5% on March 27th 2027.
The government are encouraging home owners to look at installing energy efficient technologies with the tax exemption currently being offered on a range of technologies and materials. This includes heat pumps, solar panels, battery storage, wood-fueled boilers,loft and cavity insulation, wind and water turbines. Double and triple glazing as well as draft proofing materials are also included.
Consumers can really take advantage of the scheme by making big savings on larger installation projects. The 0% tax rate will apply to both the installation and the materials as long as the installation is done as one job using a professional VAT registered installer. As an example, installing a heating system using the 0% VAT rate would also cover installing radiators and pipework.
Installing a ground source heat pump requires substantial groundwork in preparation for the ground loops(?) required, using plant equipment and labour costs- all of these would be exempt from tax during this tax incentive.
There are some restrictions on the scheme, but a professional installer can advise on the best course of action when completing a project.
