Back in 2022, the Chancellor at the time announced that the VAT on green and low-carbon boiler replacements, such as heat pumps, would change. With the change in government and a new budget announcement due at the end of October, we wanted to clarify the VAT on heat pumps remains at 0%.
As these renewable sources of energy are becoming more important and energy bills are staying high, you’re probably wondering how exactly this continued VAT reduction can help you.
With over 40 years’ of experience in providing air conditioning and heat pumps across a wide range of commercial and residential builds, Cool-Tec is well-placed to explain what the deduction scheme means for you.
Contact us today to learn how our accredited experts can install the heat pumps for your property.
What Happened to VAT on Heat Pumps In 2022?
As part of the spring 2022 statement, the British Chancellor at the time, Rishi Sunak, announced that from April, all VAT on installing energy-efficient systems will be cut from 5% to zero.
The scheme was set to last for five years and covered technologies such as heat pumps, solar panels and insulation. The rationale behind such a green initiative coincides with the Government’s net zero strategy.
The result of this change was that VAT on heat pumps, both air source and ground source, dropped to nothing, making their installation more appealing for homeowners.
It is estimated that the removal of VAT for heat pumps saves homeowners between £500 – £750 on their heat pump installation.
Additional Financial Support For Renewable Heat Sources
The extension on the deduction of VAT on heat pumps has been matched with an increase in the Government’s Boiler Upgrade Scheme.
Back in October 2021, the Government also launched a scheme to help households install low-carbon heating systems like heat pumps.
As of October 2023, this grant was increased to £7,500, further encouraging homeowners to choose these systems over traditional gas and oil systems.
Why Install A Heat Pump Now?
Aside from paying no VAT on heat pumps and being able to apply for a grant to cover part of the installation costs, there are a number of benefits to these sources of heat that are why you should install one.
- Energy-efficient heating – heat pumps reduce reliance on traditional energy sources, helping you save money on your bills.
- Lower carbon footprint – by reducing reliance on traditional sources of heat, you reduce the use of fossil fuels, in turn reducing your CO2 emissions.
- Year-round performance – these sources can provide both heating and cooling, making them useful all year round.
- Low maintenance – once installed, these systems require minimal maintenance, so they are a hassle-free heating solution.
- Compatible with existing systems – these systems can integrate with your heating systems already in your home, making installation simpler.
- Improved energy ratings – an air source heat pump can improve a property’s Energy Performance Certificate (EPC) rating, increasing its market value.
- Quiet operation – these systems operate quietly, ensuring minimal noise disruption within your home.
- Reliable in the UK climate – these systems still function in the fluctuating UK climate, making them a reliable, green solution.
Your Local Heat Pump Installation Experts
With no VAT on heat pumps and an increase in the Boiler Upgrade Scheme, now is the perfect time to install a heat pump in your home.
Trust Cool-Tec for your property’s heat pump system — the eco-friendly choice for all your heating, cooling and hot water needs.
We will work with you to design, install and maintain your heat pump system, with emergency repairs available 24 hours a day, 7 days a week. We pride ourselves on providing competitive prices (which are now less, thanks to the VAT cut) as well as a quick turnaround.
To discuss your heat pump needs and the installation process with an expert member of our experienced team, get in touch today via our online contact form or by calling us on 0800 0189 941.
