Asked by: Mike Reader (Labour - Northampton South)
Question to the HM Treasury:
To ask the Chancellor of the Exchequer, whether she has made an assessment of the potential merits of extending 0% VAT relief to clean heating technologies, including heat batteries.
Answered by Dan Tomlinson - Exchequer Secretary (Cabinet Office) (Jointly with HM Treasury)
The Government is supporting heat batteries by including them in the Boiler Upgrade Scheme, with a £2,500 grant to support homes that are not suitable for heat pumps. Heat batteries will become eligible once new product and installation standards are in place, ensuring quality and consumer protection and we expect applications to open in 2026/27, once standards, regulations and guidance have been completed.
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.
The Government assesses whether to add ESMs to this relief by evaluating them against the following tests: the primary purpose of the technology must be to improve energy efficiency and reduce carbon emissions; relieving the technology of VAT must be a cost effective lever for encouraging installations; and it must be practical for business to operate and for HMRC to administer.
Asked by: Mike Reader (Labour - Northampton South)
Question to the HM Treasury:
To ask the Chancellor of the Exchequer, what assessment she has made of the potential merits of extending 0% VAT relief to clean heating technologies such as heat batteries, including on initial costs, the number of households adopting low-carbon heating systems, and the level of exposure to changes in gas and oil prices.
Answered by Dan Tomlinson - Exchequer Secretary (Cabinet Office) (Jointly with HM Treasury)
The Government is supporting heat batteries by including them in the Boiler Upgrade Scheme, with a £2,500 grant to support homes that are not suitable for heat pumps. Heat batteries will become eligible once new product and installation standards are in place, ensuring quality and consumer protection and we expect applications to open in 2026/27, once standards, regulations and guidance have been completed.
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.
The Government assesses whether to add ESMs to this relief by evaluating them against the following tests: the primary purpose of the technology must be to improve energy efficiency and reduce carbon emissions; relieving the technology of VAT must be a cost effective lever for encouraging installations; and it must be practical for business to operate and for HMRC to administer.