Homeowners having materials like solar panels, heat pumps or insulation installed will no longer pay 5% VAT. Why? As we are no longer members of the EU and no longer constricted by their laws.
Sunak stated that being “no longer constrained by EU law” has allowed him to scrap the 5% VAT rate of energy saving insulation and solar panels. And went on to say this would “abolish all red tape imposed on us by EU”. Although this cut will not immediately apply to Northern Ireland.
He also stated, “From 2019 the European Court of Justice required us to restrict its eligibility thanks to Brexit, so I can announce for the next five years, homeowners having materials like solar panels, heat pumps or insulation installed will no longer pay 5% VAT – they will pay zero,” said Sunak.
What are the benefits of the VAT cut?
Well firstly, anyone installing energy saving materials from the list below will not have to pay any VAT.
Secondly, as a country we are clearly taking steps towards looking into a more energy efficient way of heating, cooling and providing green electricity to our homes and businesses and the government providing tax cuts in this area is proving that.
However, in as much as this can be a great gesture for providers, producers and installers of energy saving solutions within the UK, you may wonder within the current economic climate, post covid lockdowns and the extreme price increase in gas and electric causing the cost of living to go through the roof, if it’s the best use of Government Tax cuts...
It may be difficult to see just how many people within the UK would be in a secure enough position financially to invest in solar panels or energy saving solutions at all.
For more information on any government tax cuts to energy saving solutions, please feel free to contact us via our online form to book in for a chat.
