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Extending the VAT relief available for the installation of energy saving materials (ESMs)

Last updated: 5 December 2022

To help households improve energy efficiency and keep energy costs down – as well as supporting the country's long-term Net Zero ambitions – the UK government is extending the VAT relief available for the installation of energy saving materials (ESMs), from April 2022.

 The Value Added Tax (Installation of Energy-Saving Materials) Order 2022 amendments are:

  • The relief will no longer be restricted by the social policy conditions or the 60% test.
  • Wind and water turbines will be added back to the list of ESMs.
  • A temporary zero rate will be introduced with effect from 1 April 2022 until 31 March 2027.
  • Unless the government introduces further legislation to extend the period of the zero rate, the installation of ESMs will revert back to the 5% reduced rate from 1 April 2027.

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