Energy: Housing

(asked on 14th April 2022) - View Source

Question to the HM Treasury:

To ask the Chancellor of the Exchequer, if he will make an assessment of the potential merits of extending the time-limited zero-rate of VAT to the purchasing of certain types of energy saving materials by individuals looking to improve their homes for themselves.


Answered by
Lucy Frazer Portrait
Lucy Frazer
Secretary of State for Culture, Media and Sport
This question was answered on 26th April 2022

At Spring Statement 2022 the Chancellor announced that the VAT relief for the installation of energy saving materials (ESMs) would be expanded in Great Britain from 1 April 2022.

The relief continues to apply to the installation, including materials and labour costs, of ESMs, rather than the purchase of the materials themselves. However, complex eligibility conditions, introduced in 2019 following an EU Court of Justice ruling, have been removed.

Further to this, wind and water turbines have been reinstated as materials which qualify for the relief, and all qualifying installations will now also benefit from a temporary VAT zero-rate until April 2027. Overall, this represents an additional £280 million of support for investment in ESMs over the next 5 years, building on the £9.7 billion that the Government has committed to invest since March 2021 to increase the energy efficiency and decarbonisation of our homes and buildings.

Targeting the VAT relief to professional installations ensures that Government support incentivises best practice in the choice and installation of ESMs. Going further would impose significant additional pressure on the public finances, to which VAT makes an important contribution.

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