Zero Carbon = Zero VAT

Loft insulation

Zero Carbon = Zero VAT

The Government has zero rated VAT on domestic renewables like heat pumps and energy efficiency measures after a targeted campaign from the MCS Foundation and our partners.  The zero rating runs to 31 March 2027, and has successfully boosted demand for domestic renewables.

We asked for the zero rating of VAT on energy efficiency and domestic renewables to be extended until 31st March 2030. We also asked for the zero VAT to be expanded to include electricity-storage batteries, and ground works and boreholes for ground-source heat pumps, which are currently excluded from the zero VAT policy.

The MCS Foundation supported a campaign to include these small additional measures in a review and consultation on the revised VAT exemptions list, to help reduce the costs of energy efficiency measures.

This campaign was successful.

Image above: Energy efficiency measures like loft insulation are zero rated until 31 March 2027.

Zero VAT campaign aims

VAT on battery storage installed with solar PV


VAT on ground-source heat pump works


Propsed extension date of zero VAT scheme