HM Revenue and Customs updated its published VAT rates guidance on 10 July 2026 to record an end date for the 0% relief on energy-saving materials. The section covering energy-saving materials installed in residential accommodation and certain charitable buildings now states that these materials are subject to VAT relief at 0% until 31 March 20271.
The guidance lists the installed goods that fall within the relief at 0%, including air source heat pumps, ground source heat pumps, wood fuelled boilers, central heating and hot water controls, and draught stripping1. The same page states that the VAT rate for energy-saving materials in residential buildings in Great Britain is now 0%1.
Two points in the guidance sit alongside the relief. Energy-saving materials supplied on their own, without installation, are standard-rated1. Separately, the charities section of the same page still shows a 5% rate for energy-saving materials permanently installed in dwellings and buildings used for a relevant residential purpose where the total cost of the materials, excluding VAT, is not over 60% of the cost of the installation, excluding VAT1. The page does not explain how that 5% entry interacts with the 0% relief or the 31 March 2027 date, and no reconciliation of the two is given1.
"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 same update log records other changes to the page, 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 2026, and a change reflecting that education and vocational training provided by an eligible body other than a private school are VAT exempt1. Neither is connected to household energy measures.
Domestic fuel and power remain at 5% in the guidance, covering 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%1.
Why it matters for households
The 0% rate applies to the installed cost of qualifying measures, so a household buying a heat pump or heating controls through an installer sees no VAT added to that work while the relief runs. Because supply-only materials are standard-rated, the relief depends on the goods being installed as part of the job rather than bought separately1. The published end date of 31 March 2027 means the tax treatment of work carried out after that date is not set out on this page, and no replacement rate or extension is stated1. For a home's energy independence, the relief lowers the upfront cost of measures that reduce reliance on bought-in fuel, but it does not change the running costs of the fuel itself, which remain at 5% for domestic use1. The guidance does not say what rate would apply to installations completed after 31 March 20271.
What happens next
The guidance gives 31 March 2027 as the date to which the 0% relief applies1. No announcement on the rate after that date has been reported.
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