The UK applies a reduced VAT rate of five per cent to qualifying installations of energy-saving materials in private homes, with the installation of solar panels, insulation, draught-stripping and air-source heat pumps all potentially included in the relief. However, in recent years, legal disputes have effectively narrowed the scope of this lower rate to the point that very few householders can benefit from the relief, and most end up paying VAT at the full rate of 20 per cent on environmentally driven upgrades to their homes.
Source RSM
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