Question to the HM Treasury:

To ask the Chancellor of the Exchequer, pursuant to the Answer of 1 November 2022 to Question 73093 on Solar Power: VAT, if he will make an assessment of the potential merits of applying a zero per cent rate of VAT to batteries used for energy-storage purposes to supporting weather-dependant renewable energy sources, and whether he will provide and update on the review.

As set out in my previous response, at Spring Statement 2022, the Government announced the expansion of the VAT relief on the installation of energy saving materials (ESMs) to residential accommodation in Great Britain. The expansion of the relief, which includes the zero-rating of solar panel installations, represents an additional £280 million of support for investment in ESMs.

VAT is the UK’s third largest tax, forecast to raise £157 billion in 2022/23, helping to fund key spending priorities such as important public services, including the NHS and policing. Extending the ESMs relief to battery storage as a standalone technology would have a fiscal cost and should be viewed in the context of over £50 billion of requests for relief from VAT received since the EU referendum.

However, the Government keeps all taxes under review, and recognises the importance of ensuring that policy remains in step with the rapid pace of technological development in the ESMs market and the changing policy context since this particular relief was introduced.