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<p>At Spring Statement 2022, the Chancellor announced the expansion of the VAT relief
for the installation of energy saving materials (ESMs) in Great Britain from 1 April
2022.</p><p> </p><p>This relief will continue to apply to the installation of ESMs,
rather than the direct purchase of the materials themselves. However, complex eligibility
conditions, introduced in 2019 following an EU Court of Justice ruling, have been
removed.</p><p> </p><p>Further to this, wind and water turbines have been reinstated
as materials which qualify for the relief, and all qualifying installations will also
benefit from a VAT zero-rate until April 2027. Overall, this represents an additional
£280 million of support for investment in ESMs over the next 5 years, building on
the £9.7 billion that the Government has committed to invest since March 2021 to increase
the energy efficiency and decarbonisation of our homes and buildings.</p><p> </p><p>Targeting
the VAT relief on professional installations ensures that the Government supports
best practice in the choice and installation of ESMs. Going further would impose additional
pressure on the public finances, to which VAT makes a significant contribution. VAT
raised around £130 billion in 2019-20 and helps to fund key spending priorities. As
you will know, any reduction in tax paid is a reduction in the money available to
support important public services, including the NHS and policing.</p><p> </p><p>Given
this, although the Government keeps all taxes under review, there are no plans to
further extend the VAT relief to direct purchases of ESMs.</p>
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