Following the Chancellor’s recent announcement, VAT on energy-saving materials such as solar panels, insulation, and heat pumps will be reduced from five percent to zero. The Chancellor said: “A family having solar panels installed will see tax savings worth over £1,000 and savings on their energy bill of over £300 per year.” The VAT reduction will come into effect on 1st April 2022 and will last until 2027.

The Government have placed great focus on helping households from rising energy bills, in light of the current global situation around energy prices, worsened by Russia’s invasion of Ukraine.

Commercial and industrial solar have also received a boost, as the Chancellor announced there would be no business rates on various energy-saving materials such as solar panels from April 2022 as opposed to April 2023, which was previously announced in the October 2021 budget.

If you have any questions or would like to find out more, please contact Jake on 01227 277667 or by emailing him at j.mackenzie@mphaccountants.co.uk.

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