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Last updated: 27 September 2024

VAT on Insulation in the UK: Amount, Duration & Advice

VAT on Insulation in the UK: Amount, Duration & Advice
  • The UK Government announced a 0% VAT on insulation installation to reduce the cost of energy-saving materials (ESM).
  • 0% VAT on insulation in the UK is available from April 1st, 2022, until March 31, 2027.
  • Insulation is key to reducing heat loss, dampening and acting as a shield for external noise, creating a more energy-efficient and peaceful living space.

House insulation is a great way to reduce your home’s heat loss and protect it from acoustic nuisance. It can take many forms, including solid wall insulation and cavity wall insulation. Each type will depend on your home's circumstances. 

Multiple insulation grants, such as the Energy Company Obligation (ECO4) and the Great British Insulation Scheme (GBIS), offer full or partial coverage towards house insulation costs.

To meet carbon neutrality targets by 2050, the UK government has designated a 0% VAT rate on insulation and other energy-saving materials, making them more affordable for homeowners. This article will cover everything you need to know about VAT on insulation, including its duration and the relevant rules and regulations in the UK.

Consult a professional for up-to-date advice on insulation and VAT policies! GreenMatch UK  can connect you with up to 3 experts from our network, saving you countless hours of time and effort. This service is free, and you are not obligated to accept quotes. Click below to get started.

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Is there VAT on insulation in the UK?

Currently, there is 0% VAT on insulation installations across the UK. This 0% VAT rate applies from April 1, 2022, until March 31, 2027. After this period, the VAT rate will revert to a reduced rate of 5%.

  1. The 0% VAT on insulation installation helps households cut costs on energy efficiency improvements.
  2. This tax break makes insulation more affordable, promoting long-term energy savings and carbon reduction.
  3. With the zero-rate period lasting only 5 years, homeowners should act quickly to take advantage of these savings.
  4. The tax exemption covers various types of insulation, including roofs, walls, ceilings, floors, water tanks, and pipes.
  5. This policy extends beyond insulation to energy-saving materials (ESMs), such as solar panels and heat pumps.

Tip

It’s important to note that while the installation is VAT-free, materials purchased separately still incur the standard 20% VAT rate. For maximum savings, households should work with contractors who supply and install the insulation, as this allows the entire project to benefit from the 0% VAT rate.

What time period will there be 0% VAT?

The 0% VAT on insulation installation in the UK is temporary, from April 1, 2022, to March 31, 2027. This five-year window applies to England, Scotland, and Wales, with Northern Ireland joining from May 1, 2023.

After this period ends, the VAT rate will reverse back to 5%. This limited-time offer creates a sense of urgency for homeowners to act, aligning with the UK's goal of achieving carbon neutrality by 2050. Therefore, homeowners should take advantage of this tax break before it expires.

What time period will there be 0% VAT?

Rules and regulations for insulation VAT in the UK

The rules and regulations concerning the 0% VAT rate on insulation for walls can be confusing, especially considering the time periods and the differences between regions within the UK and eligible properties. Luckily, we’ve compiled a table with all of the vital information you need to know:

Rules and regulations for insulation VAT in the UK
Aspect Details
Time Period April 1, 2022 - March 31, 2027
Applicable Regions England, Scotland, Wales (from April 1, 2022)
Northern Ireland (from May 1, 2023)
Eligible Properties Residential accommodations (houses, flats, care homes, etc.)
Buildings for charitable purposes (from February 1, 2024)
Covered Materials Insulation for walls, floors, ceilings, roofs, water tanks, pipes
Scope This applies to supply and installation by contractors
Materials Only the standard 20% VAT rate applies if purchased separately. After March 31, 2027 VAT rate reverts to 5%
After March 31, 2027 VAT rate reverts to 5%
Business Properties Generally not eligible for the 0% VAT rate

Is insulation something for your household or business?

The 0% VAT reduction dates differ depending on whether the property in question is residential, commercial or charitable. 

Here’s a breakdown of the 0% VAT date windows per type of property:

  • Residential accommodations: April 1, 2022 - March 31, 2027
  • Charitable properties: February 1, 2024 - March 31, 2027
  • Commercial properties: Generally not eligible for the 0% VAT rate

The policy was implemented in Great Britain in April 2022 and Northern Ireland in May 2023. After March 31, 2027, the VAT rate will return to 5%.

So, does the 0% VAT on insulation make it worth it for households or businesses? Well, the short answer is yes, however, this rate only applies to residential accommodation and buildings for charitable purposes.

Moreover, the zero rate covers the supply and installation of insulation for ceilings, floors, walls, roofs, water tanks, and pipes. However, if energy-saving materials are purchased separately without installation, they are subject to the standard 20% VAT rate.

The policy aims to encourage the adoption of energy-efficient home improvements by offering significant tax savings, contributing to the UK's goal of achieving carbon neutrality by 2050.

We recommend consulting insulation experts for the best insulation advice tailored to your situation. To save time and money, consider requesting multiple quotes for comparison. To simplify this process, fill out our quick 30-second form below. We'll connect you with up to 3 experts from our network of professionals at no cost and with no obligation.

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