Chancellor’s Spring Statement : VAT on Energy Saving Materials, including Heat Pumps

The Heat Pump Federation and its members were delighted to hearthe Chancellor announce the reduction of VAT to zero rate on energy savingsmaterials, including heat pumps.

Bean Beanland, the HPF’s Director of Growth & ExternalAffairs said: “We, in concert with others in the sector, have long argued thatthe tax regime in the UK has favoured the burning of fossil fuels, so this is aparticularly welcome measure. We also understand that all materials and servicesare included. This level of simplicity is essential for the installercommunity, many of which are micro-businesses that struggle with overly complextax rules.”

“Setting the intervention for five years gives future visibilitywhich will encourage investment in both skills and capacity, by the wholesector in the UK. When taken in conjunction with the new Boiler Upgrade Scheme,which also starts on 1st April, domestic scale heat pumps are going to be thatmuch more affordable for both homeowners and landlords.”

“Capital costs are only one half of the equation, operationalcosts for heat pumps do still have to be addressed through the rebalancing oftaxation on electricity and fossil fuels that reflects the relative carbon andother emissions. But for today, the VAT outcome is to be celebrated and the governmentcommended for the message that this sends to consumers and to the industryalike.”

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