No VAT on Domestic Installations

On 6th April 2022 HMRC updated their guidance on energy-saving materials and heating equipment.

The VAT Notice 708/6 states in 2.1:

“From 1 April 2022 until 31 March 2027 a zero rate applies to the installation of certain specified energy-saving materials (read paragraph 2.9) in, or in the curtilage, of residential accommodation in Great Britain (read paragraph 2.20). Neither the social conditions test, nor the 60% test detailed in paragraph 2.4 will need to be applied.”

Air source heat pumps are included as energy saving equipment. Section 2.18 states the following:

“Air source heat pumps use the air as a source of heat. They absorb heat from the outside or surrounding air and transfer that into useable heat in the home for space or water heating, or both.

Fixed air source heat pumps can be reversed so that they can draw heat from inside a building, thus providing cooling during the summer as well as indoor heating for colder periods of the year.

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

HMRC’s understanding is that most air conditioning units are air source heat pumps. However, in cases of doubt, deciding whether any particular product is to be treated as an air source heat pump will depend on the facts of each case.”

To find out more and book in your new installation call County Power Today!

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