Question to the HM Treasury:

To ask the Chancellor of the Exchequer, whether she has made a recent assessment of the potential merits of exempting DIY loft insultation from VAT.

Installations of qualifying energy-saving materials (ESMs), including insulation materials, in residential accommodation and buildings used solely for a charitable purpose benefit from a temporary VAT zero rate until March 2027. After this, they will revert to the reduced rate of VAT at five per cent.

Insulation products purchased for DIY insulation are subject to the standard rate of VAT at 20 per cent, which applies to most goods and services. Tax breaks reduce the revenue available for vital public services and must represent value for money for the taxpayer. Exceptions to the standard rate have always been limited and balanced against affordability considerations.

One of the key considerations when assessing a new VAT relief is whether the cost saving is likely to be passed on to consumers. Evidence suggests that businesses only partially pass on any savings from lower VAT rates. The Government has no current plans to introduce a VAT relief on the sale of insulation productions, but the Government keeps all taxes under review.