Important VAT Information – Please read as it could save you money
Paying reduced or zero rate VAT on energy-saving products & materials for domestic residences
When you have certain energy saving materials and equipment installed in your home, you'll be charged a lower rate of VAT than normal. If the materials and equipment go into a new house, you don't pay any VAT at all. We will charge these lower or zero rates on the installation work as well as on the materials and equipment itself.
There are only certain materials and equipment that can be charged at the lower rate. However, the range is wider if the job is being funded by a grant, so it's worth speaking to us to see if you qualify for a grant towards the installation.
This guide gives you an idea of the kind of work that is charged at the lower rate.
What qualifies for the lower rates of VAT?
Installation of any of the following qualifies for the lower rate of VAT:
- controls for central heating and hot water systems
- draught insulation (eg around windows and doors)
- insulation on walls, floors, ceilings, lofts, etc
- solar panels
- wind turbines
- water turbines
- ground-source heat pumps
- air-source heat pumps
- micro combined heat and power units
- wood-fuelled boilers
You can only get these lower rates if the energy saving materials are actually installed, and the work is done on your home. You'll be charged the lower rate on the installation work itself as well as the materials.
You'll also get the lower rate on any necessary extra work that needs to be done as part of the installation - this doesn't apply if you're having them installed as part of a larger project such as a new roof or building an extension.
What doesn't qualify for the lower rate of VAT?
You can't get the lower rate of VAT on all energy saving materials and equipment. The following aren't covered by the scheme:
- energy efficient boilers
- Multi-fuel burners
- secondary or double glazing
- low emission glass
- energy efficient fridge freezers
- materials and equipment that you buy without having them installed
However, you may be able to get a grant towards the cost of installing energy saving equipment, some of which then becomes eligible for the lower rate of VAT.
Grants for energy saving equipment
If you get a grant towards the installation of certain types of energy saving equipment, and it's being installed in your main or only home, you'll pay a lower rate of VAT.
If you're 60 or older, you'll get the lower rate on the installation, maintenance or repair of a central heating system (which comprises a boiler, radiators, pipework & controls), a renewable source heating system and home security goods.
VAT & Energy Products