Government extends VAT relief on Energy Saving Materials

Government has announced the expansion of VAT relief on energy saving materials (ESMs) commencing 1 February 2024. The zero-rated VAT applies to:

• electrical battery storage
• water-source heat pumps; and
• diverters retrofitted to ESMs such as solar panels and wind turbines.

The expansion of VAT relief also extends to the installation of ESMs in buildings used only for relevant charitable purposes, while remaining in place for residential buildings. The Government is expected to publish a list of ground-works required for installation of ground source and water source heat pumps to benefit from VAT relief.

This important policy update will enable more households to install energy saving technologies, improve efficiency and reduce energy bills. This initiative is also aimed at meeting the commitment to reach net zero greenhouse gas emissions by 2050. For further information please visit Renewable Energy Consumer Code (RECC)