Sunak announces 0% VAT on energy-saving materials

Rheumatoid

Sunak announces 0% VAT on energy-saving materials

Sunak says for the next five years, homeowners will pay 0% VAT on energy saving materials, such as solar panels or heat pumps.

wonder if it extends to battery add-ons and when it will come into effect?

I'm due to pay £900 VAT on a battery install on 12 april.

Heedtheadvice

As usual with these statements the devil is in the detail.

We will probably have to wait to hear the scope of the reductions and the hoops that all will need to jump through to comply...such as currently the 5% vat on solar only applies for complete systems installed by MCS installers and anything else is 20%......if I remember correctly!

2nd_time_buyer

This the text from the statement:

"To help households improve energy efficiency and keep energy costs down – as well as supporting the UK’s long-term Net Zero ambitions – the government is extending the VAT relief available for the installation of energy saving materials (ESMs). Taking advantage of Brexit freedoms, the government will include additional technologies and remove the complex eligibility conditions, reversing a Court of Justice of the European Union ruling that unnecessarily restricted the application of the relief. The government will also increase the relief further by introducing a time-limited zero rate for the installation of ESMs. A typical family having roof top solar panels installed will save more than £1,000 in total on installation, and then £300 annually on their energy bills. The changes will take effect from April 2022. The Northern Ireland Executive will receive a Barnett share of the value of this relief until it can be introduced UK-wide"

The "additional technologies" could cover it although he mentioned wind and water turbines in the speech so perhaps that is what he was referring to.

Strange figures for a typical solar installation - that would imply a £20k install and a fair poor return. Unless the £1000 the saving is based on the 20% VAT rate and a £5k install - which sounds more political and likely.  

arty688

The current system its 5% if you have panels and battery assuming you stay within the rules.

Would the new system be the same so 0% on panels and battery ?

Although one of my quotes has contacting me to take 5% off which is actually a bit more than the 5% vat

Rheumatoid

2nd_time_buyer said:

This the text from the statement:

"To help households improve energy efficiency and keep energy costs down – as well as supporting the UK’s long-term Net Zero ambitions – the government is extending the VAT relief available for the installation of energy saving materials (ESMs). Taking advantage of Brexit freedoms, the government will include additional technologies and remove the complex eligibility conditions, reversing a Court of Justice of the European Union ruling that unnecessarily restricted the application of the relief. The government will also increase the relief further by introducing a time-limited zero rate for the installation of ESMs. A typical family having roof top solar panels installed will save more than £1,000 in total on installation, and then £300 annually on their energy bills. The changes will take effect from April 2022. The Northern Ireland Executive will receive a Barnett share of the value of this relief until it can be introduced UK-wide"

The "additional technologies" could cover it although he mentioned wind and water turbines in the speech so perhaps that is what he was referring to.

Strange figures for a typical solar installation - that would imply a £20k install and a fair poor return. Unless the £1000 the saving is based on the 20% VAT rate and a £5k install - which sounds more political and likely.  

Its a battery add on so VAT at 20% on 5k

RSP1

Does anyone know if this (Zero VAT) applies to insulation products?

2nd_time_buyer

Some good news on the budget. It seems that air to air heat pumps are now VAT free:

https://www.coolingpost.com/uk-news/industry-welcomes-vat-cut-on-heat-pumps/

Chris_Type_R

I wonder if the 0% extends to ASHPs for swimming pools

QrizB

RSP1 said:

Does anyone know if this (Zero VAT) applies to insulation products?

I'm hoping so.

I'm also hoping it applies to used panels - 20p/watt is very tempting!

Rheumatoid

Rheumatoid said:

Sunak announces 0% VAT on energy-saving materials

Sunak says for the next five years, homeowners will pay 0% VAT on energy saving materials, such as solar panels or heat pumps.

wonder if it extends to battery add-ons and when it will come into effect?

I'm due to pay £900 VAT on a battery install on 12 april.

Anyone spotted any more detail on this. I can't find anything but what I have seen doesn't seem to mention battery installs at all - retrofit or otherwise.

SteveI99

I asked on the HMRC forums and this was official reply 


The installation of batteries on their own were not covered under the 5% rate, they were only charged at the reduced rate if supplied together with a solar panel as a single supply.
So the new 0% rate will not apply to solar batteries installation on their own.