3. VAT on energy-saving products

You pay a reduced rate of VAT (5%) when certain energy-saving products are installed in your home.

Your supplier will charge you the reduced rate on the installation and any extra work that’s part of it.

Not all products qualify for the reduced rate and you can’t install them yourself.

Energy products that qualify

You pay the reduced rate of 5% for:

  • 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

Central heating systems

You pay the reduced rate of 5% for work funded through energy efficiency grants on the:

The reduced rate is only for the grant-funded part of the work.

To qualify, you must be over 60 or getting one or more of the following:

  • Child Tax Credit (but not the family element)
  • Council Tax Benefit
  • Disability Living Allowance
  • Personal Independence Payment
  • a disablement pension
  • Housing Benefit
  • Jobseeker’s Allowance (income-based)
  • Income Support
  • War Disablement Pension
  • Working Tax Credit

Energy products that don’t qualify

You pay the standard rate of VAT for:

  • heating appliances or systems - unless you get an energy efficiency grant
  • energy efficient boilers
  • secondary or double glazing
  • low emission glass
  • energy efficient fridge freezers