VENSAV3010 - Energy-saving materials: introduction

The installation of energy-saving materials in certain circumstances qualifies for the reduced rate under Group 2 of Schedule 7A to the VATA 1994. Certain key terms appear in inverted commas and are explained later on in this guidance.

Up until 30 September 2019, the scope of the relief is set out in items 1 and 2 of Group 2, and applies to the supply and installation (as a single supply) in “residential accommodation” of certain specified materials listed in legal notes 1(a) to 1(k). These are:

The installation of energy-saving materials in certain circumstances is reduced rated in Northern Ireland under Group 2 of Schedule 7A and zero-rated for a temporary period (from 1 April 2022 to 31 March 2027) in Great Britain under Group 23 of Schedule 8 to the Value Added Tax Ac 1994. Certain key terms appear in inverted commas and are explained later in this guidance. Also, the term “relief” is used throughout this guidance to refer both to the temporary zero rate and the 5% reduced rate of VAT.

Up until 30 September 2019, the scope of the relief was set out in items 1 and 2 of Group 2 of Schedule 7A Value Added Tax Act 1994 and applied to the supply and installation (as a single supply) in “residential accommodation” of certain specified materials listed in legal notes 1(a) to 1(k). These are:

(a) insulation for walls, floors, ceilings, roofs or lofts or for water tanks, pipes or other plumbing fittings;

(b) draught stripping for windows and doors;

(c) central heating system controls (including thermostatic radiator valves);

(d) hot water system controls;

(e) solar panels;

(f) wind turbines

(g) water turbines

(h) ground source heat pumps;

(i) air source heat pumps;

(j) micro combined heat and power units; and

(k) boilers designed to be fuelled solely by wood, straw or similar vegetal matter.

These are explained below in VENSAV3040 to VENSAV3090.