Question to the HM Treasury:

To ask His Majesty's Government what assessment they have made of the current VAT treatment of heat batteries in light of the different rates applied to other clean heat technologies supported through the Boiler Upgrade Scheme.

Decisions on tax policy are taken by the Chancellor at fiscal events in the context of overall public finances.

Installations of qualifying energy-saving materials 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.

When evaluating whether to add energy-saving materials to this relief, the Government uses three criteria. The technology must be primarily intended to improve energy efficiency and reduce carbon emissions; relieving the technology of VAT must be cost-effective; and it must be practical for HMRC and businesses to operate.

The Government plans to support the installation of heat batteries by making them eligible for the Boiler Upgrade Scheme. This will offer grants of £2,500 for heat battery installation in homes that are not suitable for heat pumps.