VAT Eligibility & ESM Compliance
Independent verification of your project's eligibility for 0% VAT on energy-saving materials. Don't leave thousands on the table.
0% VAT Eligible Technologies
As of February 2024, these energy-saving installations qualify for zero-rated VAT when supplied and fitted.
Solar PV Systems
Photovoltaic panels, inverters, and mounting hardware qualify for 0% VAT
Heat Pump Systems
Air source and ground source heat pumps with full electrical infrastructure
Battery Storage
Standalone battery storage now qualifies for 0% VAT from Feb 2024
VAT Rules: New Build vs. Retrofit
Understanding the differences based on HMRC Notice 708/6
| Criteria | New Build / Conversion | Retrofit / Existing |
|---|---|---|
| VAT Rate | 0% (Zero-rated) | 0% (Zero-rated) |
| Solar PV | Part of new build can be zero-rated. Must be installed as part of construction. | 0% VAT when supplied and fitted to existing residential property. |
| Heat Pumps | Zero-rated when part of new build specification. Electrical infrastructure included. | 0% VAT on supply and installation. Associated electrical work also zero-rated. |
| Battery Storage | Zero-rated as energy-saving material when installed in new construction. | 0% VAT from Feb 2024 - can be standalone without solar system. |
| DIY Installations | Not eligible for 0% VAT | Not eligible for 0% VAT |
| Supply Only | Standard 20% VAT applies | Standard 20% VAT applies |
Critical Requirement: Supply and Fit
The 0% VAT relief ONLY applies when materials are supplied AND fitted by a registered installer. Materials purchased separately or DIY installations are subject to standard 20% VAT. This requirement is non-negotiable under HMRC rules.
0% VAT Eligibility Checklist
Verify your project meets these mandatory requirements
Supply and Fit Contract
Installation must be supplied and fitted by MCS/NAPIT certified installer. No DIY or supply-only purchases.
Residential Property Status
Property must be used solely for residential purposes. Mixed-use properties may have different treatment.
MCS Certification
Installer must hold valid MCS certification for heat pump and solar PV installations to qualify.
HMRC VAT Declaration
Written confirmation from installer that 0% VAT rate is being applied per Notice 708/6.
2026 Solar Compliance (New Builds)
Minimum 1.5kWp per bedroom required for new builds from April 2026 under Warm Homes Plan.
Potential VAT Savings
On a typical self-build energy package (solar PV, heat pump, battery storage, and electrical infrastructure), 0% VAT can save between £5,000 and £15,000 compared to standard VAT rates.
Critical Timeline: 0% VAT Window
Current zero-rated VAT relief is scheduled to end on March 31, 2027
Battery Storage Relief Expanded
Standalone battery storage systems became eligible for 0% VAT, even without solar PV installation.
0% VAT Available
Solar PV, heat pumps, and battery storage all qualify for zero-rated VAT when supplied and fitted. Maximum savings window.
New Build Solar Mandate
Mandatory 1.5kWp solar per bedroom for new residential builds. Non-compliance may affect Building Control approval.
0% VAT Relief Ends
Current relief scheduled to revert to standard VAT rates. Projects must be completed before this date to benefit.
Time-Sensitive Opportunity
The 0% VAT relief represents a limited-time opportunity. Self-builders should factor in design, procurement, and installation timelines to ensure completion before the March 2027 deadline. Late-stage projects may face significant additional costs if relief expires.
VAT & Compliance Verification
Independent assessment of your project's 0% VAT eligibility and 2026 compliance requirements. Fixed-fee consultation with written confirmation.
Typical response time: Same day. Fixed-fee assessment includes written VAT eligibility confirmation.
Free Download: The 2026 Self-Builder's VAT & Compliance Guide
Don't leave 20% of your budget on the table. Our 12-page guide covers the Warm Homes Plan updates, the 1.5kWp solar mandate, and how to qualify for zero-rated VAT.
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