NIBE: Zero-Rate VAT Guidance Updated for Energy-Saving Materials
Updated VAT guidance clarifies which energy-saving materials qualify for zero-rate VAT until March 2027.
NIBE has announced updated guidance on VAT rates for energy-saving materials, effective from April 2022 in Great Britain. The revised rules remove both the social conditions test and the 60% test for qualifying installations in England, Scotland and Wales.
Heat pumps and specified energy-saving materials with ancillary supplies are zero-rated, provided they are installed as a single job for a single price. For instance, installing an air source heat pump with new radiators and pipework in residential accommodation, priced as a single job, benefits from the zero rate in Great Britain.
It is important to note that while some components of a central heating system may qualify for zero-rating, a complete central heating replacement is not eligible unless grant-funded. Only permanently fixed air source heat pumps qualify as energy-saving materials; portable units are excluded.
Further details can be found on the government website here. This clarification should aid homeowners and installers in navigating VAT regulations for energy-efficient upgrades.
