Group 23 of Schedule 8 to the Value Added Tax Act 1994 sets out zero-rated supplies of services of installing energy-saving materials in residential accommodation, and of energy-saving materials supplied by the person who installs them, in England, Wales and Scotland for supplies made on or after 1 April 2022 and before 1 April 20271. The same group covers Northern Ireland for supplies made on or after 1 May 2023 and before 1 April 20271. The group heading describes it as "INSTALLATION OF ENERGY-SAVING MATERIALS IN ENGLAND AND WALES AND SCOTLAND FROM 1 APRIL 2022 TO 31 MARCH 2027, and in Northern Ireland from 1st May 2023 to 31st March 2027"1.
The materials listed in the group's notes are insulation for walls, floors, ceilings, roofs or lofts or for water tanks, pipes or other plumbing fittings; draught stripping for windows and doors; central heating system controls, including thermostatic radiator valves; hot water system controls; solar panels; wind turbines; water turbines; ground source heat pumps; air source heat pumps; micro combined heat and power units; and boilers designed to be fuelled solely by wood, straw or similar vegetal matter1.
Residential accommodation is defined for the group as a building, or part of a building, that consists of a dwelling or a number of dwellings; a building, or part of a building, used for a relevant residential purpose; a caravan used as a place of permanent habitation; or a houseboat1.
| Nation | Zero rating applies from | Zero rating applies until |
|---|---|---|
| England, Wales, Scotland | 1 April 2022 | 31 March 2027 |
| Northern Ireland | 1 May 2023 | 31 March 2027 |
The two items in the group are relevant supplies of services of installing energy-saving materials in residential accommodation, and relevant supplies of energy-saving materials by a person who installs those materials in residential accommodation1. The dates above are the ones the legislation gives for when supplies count as relevant supplies; the text does not set out any further conditions or exceptions in the passages quoted1.
Why it matters for households
VAT is charged on most goods and services, so whether a supply falls inside Group 23 changes the tax added to the price a householder pays. For work and materials that fall within the group, the rate applied is zero rather than the standard rate, which affects the total cost of measures such as loft insulation, draught stripping, heating and hot water controls, solar panels, heat pumps and certain biomass boilers installed in a home1. The definition of residential accommodation is wide enough to take in a dwelling or part of one, some buildings used for a relevant residential purpose, a caravan used as a place of permanent habitation and a houseboat1. The dates matter because the treatment attaches to when the supply is made: the same installation carried out outside the window set for its nation does not fall within the group as described1. The rules sit within the wider regulation and policy framework that governs how household energy measures are treated.
What happens next
The group as set out runs to 31 March 2027 in all four nations, with the start date differing: 1 April 2022 in England, Wales and Scotland and 1 May 2023 in Northern Ireland1. No further steps beyond those dates are stated in the text quoted1.
Sources1 cited
- http://www.legislation.gov.uk/id/ukpga/1994/23, legislation.gov.uk