Reduced VAT on energy saving products

When you have certain energy saving materials and equipment installed in your house, you may be charged a lower rate of VAT than normal (currently 5%). This can be applicable to both materials and equipment, as well as the installation work.

There are only certain materials and equipment that can be charged at the lower rate when installed. 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.

For more details of this scheme, visit the HMRC website at http://www.hmrc.gov.uk/vat/sectors/consumers/energy-saving.htm#1

Note that this VAT exemption is only applicable to the contractor who is supplying and installing the equipment, and the homeowner who is purchasing anad having the equipment installe in their property. The supplier or merchant who supplies the installer will charge the full rate.