
2024 No. 24
VALUE ADDED TAX
The Value Added Tax (Installation of Energy-Saving Materials) Order 2024
Made 10th January 2024
Laid before the House of Commons 11th January 2024
Coming into force 1st February 2024
The Treasury make this Order in exercise of the powers conferred by sections 29A(3), 30(4) and 96(9) of the Value Added Tax Act 1994.
Citation and commencement
1 

(1) This Order may be cited as the Value Added Tax (Installation of Energy-Saving Materials) Order 2024.
(2) This Order comes into force on 1st February 2024.
Installation of energy-saving materials from 1st April 2027
2 

(1) In Schedule 7A to the Value Added Tax Act 1994 (charge at reduced rate), in Part 2, Group 2 (installation of energy-saving materials from 1st April 2027) is amended as follows.
(2) In items 1 and 2, for “residential accommodation.” substitute “—“
(a) residential accommodation, or
(b) a building intended for use solely for a relevant charitable purpose.”.
(3) In paragraph 1 of the notes (meaning of “energy-saving materials”)—
(a) the existing text becomes sub-paragraph (1);
(b) after sub-paragraph (1)(i) insert—“
(ia) water source heat pumps;”;
(c) after sub-paragraph (1)(k) insert—“
(l) electrical storage batteries within sub-paragraph (2);
(m) smart diverters.”;
(d) after sub-paragraph (1) insert—“
(2) An electrical storage battery is within this sub-paragraph if it is intended for use solely for storing energy converted from electricity that was—
(a) supplied to the residential accommodation or building in question, or
(b) generated by a microgeneration system.
(3) In sub-paragraph (2), “supplied” is to be construed in accordance with Part 1 of the Electricity Act 1989 (see section 64(1) of that Act).
(4) In sub-paragraph (1)(m), “smart diverter” means a device capable of automatically diverting electricity generated by a microgeneration system to one or more appliances, in particular circumstances.
(5) In sub-paragraphs (2) and (4), “microgeneration system” means equipment—
(a) that generates electricity, and
(b) that is itself an energy-saving material for the purposes of this Group.”.
(4) After paragraph 1 of the notes, insert—“
Installation of heat pumps
1A 
For the purposes of item 1, “installing energy-saving materials” includes carrying out groundworks, or dredging a body of water, in order to install pipework or other equipment necessary for the operation of a ground source heat pump or a water source heat pump.”.
(5) After paragraph 2 of the notes, insert—“
Meaning of “use for a relevant charitable purpose”
3 
For the purposes of this Group a building is used “for a relevant charitable purpose” if it is used by a charity—
(a) otherwise than in the course or furtherance of a business, or
(b) as a village hall or similarly in providing social or recreational facilities for a local community.”.
Installation of energy-saving materials before 31st March 2027
3 

(1) In Schedule 8 to the Value Added Tax Act 1994 (zero-rating), in Part 2, Group 23 (installation of energy-saving materials before 31st March 2027) is amended as follows.
(2) In items 1 and 2, for “residential accommodation.” substitute“—
(a) residential accommodation, or
(b) a building intended for use solely for a relevant charitable purpose.”.
(3) In paragraph 1 of the notes (meaning of “energy-saving materials”)—
(a) the existing text becomes sub-paragraph (1);
(b) after sub-paragraph (1)(i) insert—“
(ia) water source heat pumps;”;
(c) after sub-paragraph (1)(k) insert—“
(l) electrical storage batteries within sub-paragraph (2);
(m) smart diverters.”;
(d) after sub-paragraph (1) insert—“
(2) An electrical storage battery is within this sub-paragraph if it is intended for use solely for storing energy converted from electricity that was—
(a) supplied to the residential accommodation or building in question, or
(b) generated by a microgeneration system.
(3) In sub-paragraph (2), “supplied” is to be construed in accordance with Part 1 of the Electricity Act 1989 (see section 64(1) of that Act).
(4) In sub-paragraph (1)(m), “smart diverter” means a device capable of automatically diverting electricity generated by a microgeneration system to one or more appliances, in particular circumstances.
(5) In sub-paragraphs (2) and (4), “microgeneration system” means equipment—
(a) that generates electricity, and
(b) that is itself an energy-saving material for the purposes of this Group.”.
(4) After paragraph 3 of the notes, insert—“
Installation of heat pumps
4 
For the purposes of item 1, “installing energy-saving materials” includes carrying out groundworks, or dredging a body of water, in order to install pipework or other equipment necessary for the operation of a ground source heat pump or a water source heat pump.
Meaning of “use for a relevant charitable purpose”
5 
For the purposes of this Group a building is used “for a relevant charitable purpose” if it is used by a charity—
(a) otherwise than in the course or furtherance of a business, or
(b) as a village hall or similarly in providing social or recreational facilities for a local community.”.
Joy Morrissey
Amanda Milling
Two of the Lords Commissioners of His Majesty's Treasury
10th January 2024