Extending the VAT relief available for the installation of energy saving materials (ESMs)

Country / jurisdiction: United Kingdom · Year: 2022 · Status: In force · Level: National · Type: Voluntary

To help households improve energy efficiency and keep energy costs down – as well as supporting the country's long-term Net Zero ambitions – the UK government is extending the VAT relief available for the installation of energy saving materials (ESMs), from April 2022.

The Value Added Tax (Installation of Energy-Saving Materials) Order 2022 amendments are:

The relief will no longer be restricted by the social policy conditions or the 60% test.

Wind and water turbines will be added back to the list of ESMs.

A temporary zero rate will be introduced with effect from 1 April 2022 until 31 March 2027.

Unless the government introduces further legislation to extend the period of the zero rate, the installation of ESMs will revert back to the 5% reduced rate from 1 April 2027.

Official source: https://www.gov.uk/government/publications/changes-to-the-vat-treatment-of-the-installation-of-energy-saving-materials-in-in-great-britain/the-value-added-tax-installation-of-energy-saving-materials-order-2022#:~:text=The%20relief%20will%20no%20longer,2022%20until%2031%20March%202027