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VAT: air-source heat pumps

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HMRC has updated VAT Notice 708/6 Energy-saving materials and heating equipment to cover the application of the reduced rate for energy-saving materials to air-source heat pumps.

The updated guidance highlights that, while the legislation for energy-saving materials (VATA 1994 Sch 7A Group 2 Note 1) includes air-source heat pumps within the meaning of energy-saving materials, it does not refer to air-conditioning units. The guidance advises that deciding whether any particular product is to be treated as an air-source heat pump will depend on the facts of the case. Previously the guidance had suggested that no air-conditioning units could be classified as air-source heat pumps.

Issue: 1519
Categories: News