Question to the HM Treasury:

To ask the Chancellor of the Exchequer, if she will make an assessment of the potential impact on (a) energy efficiency and (b) indoor air quality of adding mechanical ventilation with heat recovery systems to the list of energy saving materials eligible for the 0% VAT rate.

This Government is committed to improving the quality and sustainability of the country’s 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.

The Government assesses whether to add ESMs to this relief by evaluating them against the following principles: the primary purpose of the technology must be to improve energy efficiency and reduce carbon emissions; and relieving the technology of VAT must be cost effective and align with broader VAT principles.