Spring statement 2022: Rishi Sunak abolishes VAT on energy saving materials for homeowners

Rishi Sunak pledged to reduce VAT on energy-saving material in a bid save homeowners money on their energy bills and help them make their homes more efficient. The change will be effective from April 2022 and last for five years. He stated that as energy costs rise, it is clear that energy efficiency will make a significant difference to your bills. However, homeowners who want to save energy can only qualify for a 5% VAT exemption. There are complicated rules about who is eligible. “The relief was once more generous, but the European Court of Justice has restricted its eligibility. “READ MORE” I am able to announce that homeowners who have heat pumps, solar panels, or insulation installed in the next five-years will no longer be subject to five percent VAT. “READ MOREOffshore wind farms get go-ahead amid a ‘pressing need for renewable energy’ – reportGrowth forecast slashed by Sunak as Sunak promises to help with economic uncertainty. “It’s encouraging to see the Chancellor push green investment and development, not just because it will edge us closer towards net zero targets, but also because it will help mitigate future oil price shocks. We knew that eco-boiler grants had been in place since April 1, but today’s reduction in VAT for homeowners installing solar panels or heat pumps is another step in the right directions. “However, despite the average tax savings of GBP1,000 per year and more than GBP300 on energy costs savings per annum, the actual cost of installing eco-materials is still very high. This is a problem that is often badly underbudgeted. This finance will be needed by both property investors and families.