The Chancellor announced in his Spring 2022 Statement that he is going to reduce VAT on the installation of a raft of domestic energy saving measures, including heat pump air conditioning systems (air conditioning systems that provide heating as well as cooling).
The zero rated VAT announcement is designed to drive the uptake of carbon reducing technologies and help cut energy bills for millions of households.
As far as the domestic air conditioning industry is concerned, the Chancellor has considerably simplified the rules about which types of heat pump qualify.
Following consultation with HMRC, BESA (Building Engineering Services Association) the defining factor for VAT to be applied as zero rated to domestic air conditioning is that the system installed must have the functionality to heat the home, irrespective of whether it can also cool or not.
Which means typical domestic inverter based split and multi-split air conditioning systems are now VAT zero rated, providing a lower cost alternative to homeowners seeking new, energy efficient heating as well as cooling.
For the last few years, with more of us spending more time at home, the leading air conditioning manufacturers have all extended their domestic air conditioning ranges. LG’s Art Cool Mirror, Mitsubishi’s Zen, Daikin’s Stylish & Emura and the Panasonic Etherea are just a few of the systems that provide a wide range of heating and cooling benefits to homeowners.
Many domestic air conditioning systems are smaller, they can be wall, floor or ceiling mounted, are available in a wide range of colours, some have built in Wi-Fi and selected models have additional features including air purifiers.
So, there is sure to be a system suitable to every homeowner’s requirements.
It is important to note that the zero rated Vat announcement only applies to full installations and cannot be applied to equipment supply only.
The Government has already set out their stall in terms of their strategy to decarbonise buildings and invest more in greener energy.
We are all aware that energy prices are increasing and that gas prices are currently increasing at a faster rate than electricity prices.
As more electricity comes from wind and solar, electricity costs will continue to be relatively cheaper than traditional fossil fuels. Oil and gas are also far more likely to increase in price via future taxation and supply challenges.
Which is why now is a good time to consider changing how you heat your home – with air conditioning that provides sufficient heating in Winter and helps keep you cool in Summer months.
Marc Knibbs, Spheretech Commercial Director adds,
“The zero rated VAT announcement on domestic air conditioning systems that heat the home is a tonic for domestic customers. Alongside the existing energy efficient benefits of heating your home via air conditioning, provides options for homeowners. Especially those seeking a cleaner and more cost effective way of shielding their finances from future escalating heating bills.”
To arrange a free, no obligation survey and quotation to determine your home air conditioning requirements, call 01327 810 510 or email [email protected] or alternatively fill in the form below and we will contact you.
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