HM Revenue and Customs published a tax information and impact note on 29 March 2023 setting out the extension of the temporary VAT zero rate for energy-saving materials to Northern Ireland1. The measure is made by the Value Added Tax (Installation of Energy-Saving Materials) Order 2023 and enters into force on 1 May 20231.
The note states that the instrument extends the temporary VAT zero rate for energy-saving materials that was introduced in Great Britain on 1 April 2022, and which applies until 31 March 2027, to Northern Ireland1. It also extends to Northern Ireland the reversal of legislation introduced in 2019, which had narrowed the scope of the previous VAT relief for energy-saving materials1.
The government says the change is allowed under the Windsor Framework and aligns the VAT treatment of the supply of installations of energy-saving materials in Northern Ireland with Great Britain1.
"This instrument extends the temporary VAT zero rate for energy-saving materials that was introduced in Great Britain on 1 April 2022 (and which applies until 31 March 2027) to Northern Ireland."
| Element | Detail |
|---|---|
| Published | 29 March 20231 |
| Enters into force | 1 May 20231 |
| GB zero rate introduced | 1 April 20221 |
| GB zero rate applies until | 31 March 20271 |
| Legal basis cited | Windsor Framework1 |
The note does not list which materials fall within the relief, nor does it give rates, costs or eligibility conditions for households. Those details have not been reported in this document1.
Why it matters for households
VAT is charged on the supply and installation of many home energy improvements, so whether a job is zero-rated changes the amount a household pays. Before this instrument, the temporary zero rate introduced in Great Britain on 1 April 2022 applied there but not in Northern Ireland, which meant the same installation could carry a different VAT treatment depending on where in the UK it took place1. From 1 May 2023 the treatment of installations of energy-saving materials in Northern Ireland is aligned with Great Britain1.
For a household, the practical effect is on the invoice: a zero rate removes the VAT element that would otherwise be added to the supply and installation of qualifying materials. The note also reverses, for Northern Ireland, the 2019 legislation that had narrowed the scope of the earlier relief, which affects how many types of material can fall within it1. The relief is temporary, running to 31 March 2027 on the same timetable as Great Britain1, so its value to a household depends on when work is carried out.
The note does not set out how the change interacts with grant-funded work in Northern Ireland, and no such detail has been reported in it1.
What happens next
The order enters into force on 1 May 20231. The zero rate applies until 31 March 2027, the end date already set for the Great Britain relief1.