The VAT rate for energy-saving materials installed in residential buildings in Great Britain became 0% on 11 July 2022, according to HM Revenue and Customs guidance on VAT rates for goods and services1. The guidance states plainly: "The VAT rate for energy-saving materials in residential buildings in Great Britain is now 0%"1.
The relief covers installed goods rather than materials bought on their own. HMRC lists air source heat pumps, ground source heat pumps, wood fuelled boilers, central heating and hot water controls and draught stripping at 0%1. The guidance adds that "these energy saving materials are subject to VAT relief at 0% until 31 March 2027"1. Energy-saving materials supplied without installation remain standard-rated1.
| Item | VAT rate |
|---|---|
| Air source heat pumps | 0%1 |
| Ground source heat pumps | 0%1 |
| Boilers, wood fuelled | 0%1 |
| Central heating and hot water controls | 0%1 |
| Draught stripping | 0%1 |
| Energy-saving materials, supply only | Standard-rated1 |
The same guidance sets out rates for domestic fuel and power, which are unchanged at 5%: electricity, gas, heating oil and solid fuel for domestic and residential use, or for non-business use by a charity1. Water supplied to households is 0%, as are sewerage services supplied to domestic or industrial customers and the emptying of domestic cesspools and septic tanks1.
The guidance also records a separate relief for heating equipment and the connection of a gas supply, to the extent that these are grant-funded by certain funders for people aged over 60 or in receipt of certain benefits1. It does not set out in the same section which funders or benefits qualify.
"The section 'Energy-saving materials installed in residential accommodation and certain charitable buildings' has been updated with information on which energy-saving materials are subject to VAT relief at 0% until 31 March 2027."
The guidance covers Great Britain. It does not state the position for Northern Ireland in the passages covering energy-saving materials1. The page also carries unrelated updates, including a temporary reduced rate of VAT on certain supplies of children's meals, tickets and family attractions from 25 June 2026 to 1 September 20261.
Why it matters for households
VAT is charged on the installed cost of qualifying measures, so a 0% rate removes a tax element that would otherwise sit inside the price a householder pays. At the previous 5% rate, VAT added five pounds to every hundred pounds of the installed cost; at 0% that amount is no longer charged1. The relief applies to the installation as a whole rather than to materials bought separately, so the treatment of a job depends on whether the goods are permanently installed in a dwelling or a building used for a relevant residential purpose1.
For a home's energy independence, the effect is on the upfront cost of measures that reduce reliance on bought-in electricity, gas, heating oil or solid fuel. Insulation and heating controls cut the amount of energy a home needs; heat pumps change the fuel it runs on. The relief lowers the entry cost of those installed measures, while the running cost of the fuel itself is unaffected, since domestic electricity, gas, heating oil and solid fuel remain at 5%1.
The relief is time-limited. HMRC states it applies until 31 March 2027, so the rate that applies to work carried out after that date has not been set out in this guidance1.
What happens next
The 0% rate on qualifying installed energy-saving materials runs until 31 March 20271. No further change to the rate after that date is reported in the guidance.
Sources2 cited
- VAT rates on different goods and services - GOV.UK, aka.hmrc.gov.uk
- VAT rates on different goods and services - GOV.UK, gov.uk