Reduced rate VAT – 0% – applies on installation of all domestic Heat Pumps

The reduced rate of 0% will be available for supplies of services of installing energy saving materials, heat pumps and solar panels from 1 April 2022 – as announced in the Spring Statement on 23 March 2022.

Installation of any of the following energy saving materials in residential accommodation qualifies for the lower rate of VAT:

  • controls for central heating and hot water systems
  • draught insulation (e.g., around windows and doors)
  • insulation on walls, floors, ceilings, lofts, etc
  • solar panels
  • air-source heat pumps and ground-source heat pumps (including ancillary supply like ground works)
  • wind turbines
  • water turbines
  • micro combined heat and power units
  • wood-fuelled boilers

The lower rate of VAT applies if the energy saving materials are installed and the work is done on residential accommodation (including residential private care homes).

The lower rate also applies on any necessary extra work that needs to be done as part of the installation.


Air source heat pumps can be categorised as:

  • Air to Water – this is where a heat pump acts as your central source of heating, serving radiators, underfloor heating, and hot water generation.
  • Air to Air – traditionally known as air conditioning split systems that both heat and cool rooms. These can be wall mounted, ceiling mounted or ducted and can be either individually installed, or installed in groups attached to one outdoor unit (multi-split ot VRF)


HansA offer the most efficient solutions, each installation is tailer-made for your specific requirements.


March 2022