Updates

The Value Added Tax (Installation of Energy-Saving Materials) Order 2024

  • Legal

Jurisdiction: United Kingdom

Commencement: 1st February 2024

Amends: Value Added Tax Act 1994

Mini Summary

The Value Added Tax Act 1994 ensures Value Added Tax (VAT) is charged on the importation of goods into the United Kingdom (UK) and on the sale of goods and services in the UK.

Duties

Individuals and organisations must pay VAT at prescribed periods. Interest may be charged on the late payment of VAT.

Reduced rate of VAT

A reduced rate of VAT is charged for the products and services listed in Schedule 7A.

Zero-rating

Goods or services may be zero-rated. This means that VAT is not charged for the import or sale of that product or service.

Schedule 8 sets out the list of goods and services that are zero-rated.

Deposit schemes

Operators of deposit schemes under the Environment Act 2021 must pay VAT on unreturned deposits. No VAT will be charged for returned deposits.

Offences

Regulation 72 sets out the list of offences.

 

Amendment

Zero-rating

The installation of energy-saving materials* in buildings used for charities is zero-rated until 31st March 2027. This includes the installation of equipment or groundworks necessary to install energy-saving materials.

*Energy-saving materials include:

  • insulation for walls, flooring, ceilings, roofs, water tanks, pipes and other plumbing fittings;
  • draught stripping;
  • central heating system controls;
  • hot water system controls;
  • smart diverters;
  • electrical storage batteries;
  • solar panels;
  • ground source heat pumps;
  • air source heat pumps;
  • micro combined heat and power units;
  • boilers designed to be fuelled by wood or straw;
  • wind turbines; and
  • water turbines.

Reduced rate

From 1st April 2027, a reduced rate of Value Added Tax (VAT) will be charged for the installation of energy-saving materials in buildings used for charities. This includes the installation of equipment or groundworks necessary to install energy-saving materials.

Link to full government text

 

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