Energy-saving materials installed in a home are 0% VAT until 31 March 2027, after which the rate is due to become 5%. That covers insulation of walls, floors, ceilings, roofs and lofts, draught stripping, solar panels, battery storage, air and ground source heat pumps and heating controls, under HMRC VAT Notice 708/6. It does not cover windows, soundproofing, render on its own, EV chargers, cavity wall extraction or damp works, which stay at 20%. On a £15,000 external wall insulation job the relief is worth £3,000 against the standard rate.
Key takeaways
- 0% VAT applies to energy-saving materials installed in residential property until 31 March 2027, then 5%.
- Qualifying: wall, floor, ceiling, roof and loft insulation; draught stripping; solar panels; batteries (including standalone, since 1 February 2024); air and ground source heat pumps; heating controls.
- Not qualifying: windows and doors, soundproofing, render or cladding on its own, EV chargers, cavity wall extraction, ventilation and damp works. All 20%.
- The relief is on the installation: materials and labour together. There is no income test and no application; the installer simply does not charge VAT.
- A mixed job is split on the quote, each line at its own rate. Extras that are not part of the 0% install are 20%.
- On a 3 bed semi, external wall insulation at £12,000 to £22,000 would carry £2,400 to £4,400 of VAT at the standard rate; at 0% it carries none.
How does 0% VAT on energy-saving materials work?
HMRC treats certain "energy-saving materials" installed in a home as zero rated. The relief applies to the installation as a whole, meaning the materials and the labour to fit them, when an installer supplies both. Buying insulation from a merchant and fitting it yourself is standard rated; the relief is for installed work.
There is nothing to apply for. The installer does not add VAT to the qualifying part of the invoice. You should see the rate on the quote, and on our quotes the insulation lines are marked at 0% and anything that does not qualify at 20%.
The 0% rate runs to 31 March 2027. From 1 April 2027 the rate for energy-saving materials is due to become 5%, which is still well below the standard 20%. Work installed before the end of March 2027 is zero rated.
What is 0% VAT and what is 20%?
| Measure | VAT rate to 31 March 2027 | Rate from 1 April 2027 | Notes |
|---|---|---|---|
| External wall insulation | 0% | 5% | Insulation and the render finish that is part of the system |
| Internal wall insulation | 0% | 5% | Boards, framing and plaster finish as part of the install |
| Loft insulation | 0% | 5% | Top-ups included |
| Room in roof and flat roof insulation | 0% | 5% | Roof and ceiling insulation |
| Floor insulation | 0% | 5% | Suspended timber and solid floors |
| Cavity wall insulation (fill) | 0% | 5% | Fill only |
| Draught proofing | 0% | 5% | Draught stripping to doors and windows |
| Solar panels | 0% | 5% | Installed on a home |
| Battery storage | 0% | 5% | Also standalone batteries, since 1 February 2024 |
| Air and ground source heat pumps | 0% | 5% | Unit, cylinder and controls as part of the install |
| Heating controls | 0% | 5% | Thermostats, zoning, TRVs |
| Windows and doors | 20% | 20% | Not an energy-saving material for VAT purposes |
| Soundproofing | 20% | 20% | Acoustic work is not energy saving in HMRC's definition |
| Render or cladding on its own | 20% | 20% | Only 0% when it is the finish on an insulation system |
| EV charger | 20% | 20% | |
| Cavity wall extraction | 20% | 20% | Removing failed fill; the re-fill afterwards is 0% |
| Damp proofing and ventilation | 20% | 20% | Extractor fans, PIV units, air bricks, damp works |
What is the 0% rate worth?
Using typical price ranges from our own service pages and the market, all quoted at 0%:
- External wall insulation, 3 bed semi, £12,000 to £22,000. At 20% that would be £2,400 to £4,400 more. At 5% from April 2027, £600 to £1,100 more.
- Internal wall insulation, full 3 bed, £8,000 to £15,000. At 20%, £1,600 to £3,000 more. At 5%, £400 to £750.
- Loft top-up, £400 to £900. At 20%, £80 to £180 more.
- Floor insulation, median job £4,320 from our quote book. At 20%, £864 more; at 5%, £216.
- Solar, 4 kW system, £5,000 to £8,000. At 20%, £1,000 to £1,600 more; at 5%, £250 to £400.
- Air source heat pump, 3 bed, £8,000 to £15,000 before the £7,500 Boiler Upgrade Scheme grant. At 20%, £1,600 to £3,000 more; at 5%, £400 to £750.
- 10 kWh battery, £4,500 to £7,000. At 20%, £900 to £1,400 more.
The bigger the job, the bigger the saving, which is why 31 March 2027 matters more for wall insulation and heat pumps than for a loft top-up. The London insulation price report has the full price ranges.
How is a mixed job split on the quote?
Many projects include work at both rates. The rule is that each element takes its own rate, and the quote shows them as separate lines. Three common cases:
External wall insulation plus render on a wall that is not insulated
The insulated walls, including their render finish, scaffold and making good, are 0%. If you ask for the same render on a wall that is not being insulated, to match, that wall is a separate 20% line. See render and cladding.
Loft insulation plus new windows
The loft top-up (say £700) is 0%. The windows, £5,000 to £12,000 for a 3 bed house, are 20% throughout. A combined quote shows £700 at 0% and the window line at 20%. Windows arranged through us are installed by accredited FENSA or CERTASS registered installers.
Internal wall insulation on a party wall for sound
A lining fitted to a party wall to cut noise from next door is soundproofing, at 20%. If the same room also has an external wall lined with insulation for warmth, that wall is 0%. Two walls, two rates, two lines. See soundproofing.
Extras that are not part of a 0% install, such as scaffold hired for a separate 20% job or making good after non-insulation work, are 20%. Extras that only exist because of the insulation, such as extending a soffit or moving a downpipe for external wall insulation, go with the insulation.
What happens after 31 March 2027?
The rate for energy-saving materials is due to become 5%. That is a reduced rate, not the standard rate, so the saving against 20% remains large. But on a £15,000 external wall insulation job, 5% is £750 that the same job invoiced in March 2027 would not carry.
If you are planning wall insulation, solar or a heat pump for 2027, the practical advice is to have it surveyed, quoted and booked in good time. External wall insulation in particular depends on weather and scaffold, so the when to book EWI guide is worth a read. Get a free quote or book a free heat loss survey and we will show the VAT position on every line.
Frequently asked questions
Is there VAT on insulation in the UK?
Not until 31 March 2027. Wall, floor, ceiling, roof and loft insulation installed in a home is 0% VAT under HMRC VAT Notice 708/6. From 1 April 2027 the rate is due to become 5%.
Is VAT charged on solar panels and batteries?
No. Solar panels and battery storage installed in a home are 0% VAT until 31 March 2027, and standalone batteries have qualified since 1 February 2024. After March 2027 the rate is due to become 5%.
Are heat pumps 0% VAT?
Yes. Air and ground source heat pumps installed in a home are 0% VAT until 31 March 2027, on top of the £7,500 Boiler Upgrade Scheme grant.
Are new windows 0% VAT?
No. Windows and doors are 20% VAT. They are not classed as energy-saving materials for VAT purposes, even when double or triple glazed.
Is soundproofing 0% VAT?
No. Soundproofing is 20% because HMRC's relief is for materials installed for their energy-saving qualities. Where a lining also thermally insulates an external wall, that element can be 0% and the quote shows the split.
Do I have to apply for the 0% rate?
No. The installer does not charge VAT on the qualifying work. Check that your quote shows the rate on each line.
Does the 0% rate apply to DIY materials?
No. The relief is for installed energy-saving materials supplied and fitted by an installer. Materials bought to fit yourself are standard rated.