Energy Saving Materials - VAT zero rate extended

31 January 2024      Andrea Marshall, Tax Specialist

HMRC has published a policy paper: Extension of VAT energy-saving materials relief.  This provides a little bit more information regarding the Energy Saving Materials or ESMs due to be added to the list of zero-rated reliefs wef 1 February 2024:

1. Reinstatement of the relief for the installation of ESMs in buildings used solely for relevant charitable purposes, such as village halls or similar recreational facilities for a local community.

2. The addition of:

  • electrical batteries that store electricity generated by certain ESMs and the grid
  • water-source heat pumps
  • diverters that enable excess electricity from certain ESMs to be used within a building in which it is generated rather than exported to the grid

3. The addition of certain preparatory groundworks that are necessary for the installation of ground- and water-source heat pumps.

You can find the link to the statutory instrument that amends the legislation here.

HMRC has alos updated Energy-saving materials and heating equipment (VAT Notice 708/6)

If you have any questions please contact Andrea.

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