VAT
The question
To ask the Chancellor of the Exchequer, what recent assessment she has made of the potential economic impact on households of extending the 0% VAT rating on energy efficiency measures and domestic renewables beyond March 2027.
Answered by Dan Tomlinson
This Government is committed to improving the quality and sustainability of our housing stock, through improvements such as low carbon heating, insulation, solar panels and batteries. This will be vital to making the UK more energy resilient and meeting our 2050 Net Zero commitment.
Installations of qualifying energy-saving materials (ESMs) in residential accommodation and buildings used solely for a charitable purpose benefit from a temporary VAT zero rate until March 2027, after which they will revert to the reduced rate of VAT at five per cent.
As with all tax policy, the government keeps VAT under review and decisions on tax changes are made by the Chancellor in the context of the public finances.
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