Zero-rated VAT on energy-saving materials

Zero-rated VAT (Value Added Tax) on energy-saving materials means the HMRC (HM Revenue and Customs) relief that currently applies the 0% VAT rate to installations of specified energy-saving materials in residential accommodation and, from 1 February 2024, buildings used solely for a relevant charitable purpose. HMRC Notice 708/6 says the relief covers installation services and materials supplied by the installer, but not retail-only sales of materials without installation. The current zero-rate window runs to 31 March 2027 and reverts to the 5% reduced rate from 1 April 2027 unless the law changes. Listed materials include insulation, heating and hot-water controls, solar PV panels, air source heat pumps, ground source heat pumps, water source heat pumps, electrical storage batteries and smart diverters; EV chargepoints are not listed energy-saving materials in that notice. The label is separate from a grant, DNO approval, MCS certification, SEG acceptance, supplier tariff eligibility or a guarantee that a quoted project has the correct VAT treatment.