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Updated guidance on zero VAT rates

From 1 April 2022 until 31 March 2027 a zero rate VAT applies to the installation of certain specified energy-saving materials.

The new rules effective from 1 April 2022 in Great Britain remove both the social conditions test and the 60% test for all installations of qualifying energy-saving materials in England, Scotland and Wales.

Heat pumps and the installation of certain specified energy-saving materials with ancillary supplies are zero-rated in Great Britain. For example, the installation of an air source heat pump together with new radiators and pipework in residential accommodation is carried out as a single job and for a single price. In this example, the installation of the new radiators and pipework are ancillary to the installation of the air source heat pump. Therefore, this single supply benefits from the zero rate in Great Britain.

It is important to note that while some components of the central heating system which may consist of a conventional boiler, radiators, copper pipe, radiator valves, heating controls etc. may be either zero-rated, a central heating replacement is not included in the list of energy saving materials eligible for either the zero or the reduced rate. However, the installation of a central heating systems may still be subject to the reduced rate if grant funded.

Note, only air source heat pumps that are permanently fixed and are not portable or moveable qualify as energy-saving materials.

Further information on how this is applied here


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