Question to the HM Treasury:

To ask the Chancellor of the Exchequer, if he will make an assessment of the potential incentive to decarbonise homes of extension of the Value Added Tax (Installation of Energy-Saving Materials) Order 2022 to Northern Ireland.

This question was answered on 7th June 2023

At Spring Statement 2022, it was announced that the installation of qualifying energy saving materials in residential accommodation in Great Britain would benefit from a temporary VAT zero rate until 31 March 2027, after which they will revert to the reduced rate of VAT at five per cent. At that time, the relief could not be introduced in Northern Ireland under the terms of the Northern Ireland Protocol. Following the agreement of the Windsor Framework, however, these changes were extended to Northern Ireland on 1 May 2023.

This support will aid households in improving the energy efficiency of their homes and will help to reduce carbon emissions. Further information on the impact of this VAT relief in Northern Ireland specifically can be found in this Explanatory Memorandum and this Tax Information and Impact Notice on the extension of the relief to Northern Ireland.

At Spring Budget 2023, the Government published a call for evidence seeking views on further potential areas for reform to this VAT relief. The call for evidence closed on 31 May 2023. We are carefully analysing the responses received, and will publish a summary of responses and next steps in due course.