Energy Saving Savings?
There was one positive statement for homeowners in yesterday’s Spring Statement. Consumers investing in energy saving materials such as insulation, solar panels, heat pumps etc will pay no VAT on purchases in the next five years. VAT on these goods was previously set at 5% so the saving won’t be as huge as you first expect, but it is still a saving.
For example, a 12kw Samsung Air Source Heat Pump, currently available online for £8,800 will cost £420 less without the VAT. More modest savings are available for anyone wishing to insulate their roof space. It is estimated that most homes recover the cost of roof insulation after only a year.
OakenStone Design Planning Build are fitting more and more heat pumps as clients reject gas and oil. Paired with good levels of insulation and tight construction, they are an extremely efficient source of heating and hot water, and they are available in a range of sizes to suit different homes.
However, it remains to be seen how this new VAT bonus will be implemented. The costs of new energy saving measures extend beyond the simple purchase cost of materials. Will the costs of labour and the additional materials required also be zero rated? If so, great! That would represent a significant saving for the consumer. However, if VAT is charged at the full rate on all but the actual named product, then the saving will be negligible and may not be enough to tempt more homeowners into committing to energy saving measures.
Watch this space…