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A zero-rate of VAT on the installation of energy-saving materials (ESMs), including solar panels, in residential accommodation, was introduced on 1 April 2022. At the time, it only applied to England, Scotland, and Wales.

Following a new agreement between the UK and the EU, the zero-rating was also implemented in Northern Ireland on 1 May 2023.

The relief is set to last until 31 March 2027. On 1 April 2027, the VAT rate on such supplies will return to 5% (the reduced rate).

UK VAT law is consolidated in the Value Added Tax Act 1994. These changes were implemented through statutory instruments: The Value Added Tax (Installation of Energy-Saving Materials) Order 2022, and The Value Added Tax (Installation of Energy-Saving Materials) Order 2023, which amended the  1994 Act.


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