Heat Pumps: VAT
The question
To ask the Secretary of State for Energy Security and Net Zero, what assessment he has made of the potential impact of VAT on the number of domestic retrofits undertaken annually.
Answered by Martin McCluskey
A 0% rate of VAT on the installation of heat pumps and biomass boilers in domestic properties is already in place. Additionally, installations of qualifying energy-saving materials (ESMs) can benefit from reduced VAT. VAT treatment is the responsibility of the Treasury, and they keep all taxes under review. The Treasury assesses ESMs based on energy efficiency, carbon emissions, cost-effectiveness and alignment with broader VAT principles.
There are also already a number of government schemes offering financial support to consumers looking to upgrade their homes. The Warm Homes Plan will be published shortly and will provide further information on the government’s approach to decarbonising our housing stock.
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