Synopsis
This order expands the zero rate of VAT for qualifying energy-saving materials to buildings used solely for relevant charitable purposes.
Further technologies are also added to the scheme, including water source heat pumps, qualifying electrical storage batteries and smart diverters.
Summary
The Value Added Tax (Installation of Energy-Saving Materials) Order 2024 will amend the Value Added Tax Act 1994 on 1 February 2024.
This legislation applies across the UK.
What will change?
The 2024 order expands the zero rate of VAT for qualifying energy-saving materials to buildings used solely for relevant charitable purposes.
The following materials and activities are added to the list of energy-saving materials qualifying for the zero rate of VAT:
Reduced rate applicable from 1 April 2027
The zero rate of VAT will end on 31 March 2027. From this date a VAT rate of 5% will apply.
Definitions
Relevant charitable purpose: buildings used by a charity otherwise than for business purposes; or as a village hall or similar social or recreational facility for a local community.
Background
The Value Added Tax (Installation of Energy-Saving Materials) Order 2022 applied a temporary zero rate of VAT on the installation of qualifying energy-saving materials in residential accommodation until 31 March 2027.
Greenspace subscribers receive full monthly updates summarising new and forthcoming legislation applicable to their organisation.
To receive these free updates by email, please subscribe to our mailing list. For a free trial and demonstration of Greenspace or a quotation, please contact us by email.