708/6/21 Energy-saving materials

Part V8 HMRC Notices
Part V8 HMRC Notices | Commentary

708/6/21 Energy-saving materials

Part V8 HMRC Notices | Commentary

Energy-saving materials

February 2021

This notice cancels and replaces Notice 708/6/11 (August 2019).

1 Overview

1.1 This notice

This notice explains when the installation of energy-saving materials and heating equipment is reduced rated.

Information on the liability of other building work is explained in Buildings and construction (VAT Notice 708) and Reliefs from VAT for disabled and older people (Notice 701/7).

1.2 Who should read this notice

You should read this notice if you are a contractor or subcontractor installing:


    •     energy-saving materials;


    •     grant-funded heating equipment.

1.3 The law

VATA 1994, s 29A (as inserted by the Finance Act 2001) holds that goods and services specified in Sch 7A to the Act are reduced-rated.

Schedule 7A, Group 2 specifies when installations of energy-saving materials are reduced-rated.

Schedule 7A, Group 3 specifies when grant-funded installations of heating equipment and security goods are reduced-rated.

You can find more information about current rates of VAT in Notice 700 'The VAT guide'.

Main narrative treatment—V4.409.

2 Installations of energy-saving materials

Main narrative treatment—V4.409.

2.1 Reduced-rated installations

The reduced rate applies to the installation of certain specified energy-saving materials (see paragraph 2.9) in, or in the curtilage of residential accommodation (see paragraph 2.20).

The reduced rate applies whether or not the installation is grant funded and includes the price of the goods themselves. However, with effect from 1 October, an installation of energy-saving materials in residential accommodation will only benefit from the reduced rate where one of the social policy conditions is satisfied (paragraph 2.3) or a new 60% threshold is not exceeded (paragraph 2.4).

Where the 60% threshold is exceeded, the value

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