Energy-saving products like as solar panels and heat pumps will be exempt from VAT for the next five years, according to the Chancellor Rishi Sunak’s announcement last month.
According to the announcement, which was released as part of the Spring Statement, it applies to the installation of the following energy-efficient materials:
- Solar panels
- Heat pumps that draw heat from the ground
- Heat pumps that use air as a source of heat
- Central heating and hot water system controls
- Boilers that use wood as fuel
Materials used in energy conservation are now subject to a VAT rate of 20 percent. The cost of installation is subject to a lower 5 percent VAT rate for those receiving specific benefits or if the cost of the products/materials does not exceed 60% of the cost of the installation (whichever is greater).
Incentives for low-carbon technology purchases, such as those that cut energy costs while simultaneously lowering home carbon emissions, may be boosted if the government abolished the value-added tax (VAT).
What is the reason behind the government’s decision to eliminate VAT on energy-saving materials?
During the current energy crisis, this is a component of a larger aim to assist homes. British citizens might save money on their gas and energy costs by installing solar panels or heat pumps.
Homeowners may save £330 per year on their energy costs, or £6,600 over the course of 20 years if they install solar panels. The cost of household solar panels has plummeted by a stunning 50% since 2011.
People who have a few thousand to spare will benefit from this new law, but others who are really suffering amid the energy crisis are unlikely to benefit from it.
According to estimates, 6.32 million families might be forced into fuel poverty as a consequence of the current price limit increase, which took effect on April 1, 2022.
These millions of people who are struggling to power their houses will not be able to shell out a few thousand pounds to get solar panels or heat pumps – even if the VAT is removed from the cost of these technologies.
£5,000 Voucher For Air Source Heat Pumps!
The government understands that not everyone can fork out the cost of brand new energy-saving upgrades for their home and to achieve the UK’s energy goals they have introduced the boiler upgrade scheme. So as well as paying 0% VAT on new energy-saving measures, homeowners in the UK can now apply for a £5,000 voucher towards to cost of a brand new air source heat pump to make your home more energy efficient.
As well as the government voucher, Elite Group customers can pay any additional costs through 0% APR finance so there’s no upfront cost to you at all!
Give us a call on
You may also be interested in..