The UK Green Building Council (UKGBC) published its response to an HM Treasury call for evidence on VAT relief for energy saving materials in May 2023. The call for evidence sought views on extending the relief to additional energy saving technologies1.
The relief was expanded following an announcement at the Spring Statement 2022, providing tax incentives worth approximately £280 million to improve the energy efficiency of homes over the five years to 31 March 20271. UKGBC said it welcomed the government's commitment both to increase tax incentives by that amount and to widen the scope of the relief to further technologies1.
The council stated that it is largely technology agnostic, and argued that applying the relief differently across technologies disadvantages some useful energy saving measures. In its words, this unhelpfully reduces the options available to home and building owners and reduces the grid balancing potential those technologies could provide1.
"UKGBC is largely technology agnostic, but differential application of VAT relief disadvantages some useful energy saving technologies unhelpfully reducing the options available to home and building owners and reducing the grid balancing potential that these technologies could provide."
The full consultation response is available as a downloadable document from UKGBC1. The sources do not list which specific technologies UKGBC asked to be added to the relief, nor which technologies are currently excluded from it.
Why it matters for households
VAT relief changes the price a household pays for qualifying energy-saving materials, so the scope of the relief decides which measures carry the lower rate and which do not. Where relief applies unevenly, the upfront cost of some measures is higher than others, which affects the range of options open to a home and the payback period a household might see. The £280 million figure is the government's estimate of the total tax incentive over the five years to 31 March 2027, not a per-household amount1. The end date of the relief therefore sets the window in which qualifying work can be carried out. Which measures qualify is set out in the list of energy-saving materials covered by the relief.
What happens next
The call for evidence closed and UKGBC's response was published in May 20231. The sources do not report any government decision on extending the relief to additional technologies, nor a date for one.