Heating: VAT

Treasury written question – answered on 22nd November 2021.

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Photo of Alan Whitehead Alan Whitehead Shadow Minister (Department for Business, Energy and Industrial Strategy) (Energy and Climate Change), Shadow Minister (Business, Energy and Industrial Strategy)

To ask the Chancellor of the Exchequer, if he will make it his policy to reduce the VAT on heat batteries to five per cent as part of the transition to a net zero energy system.

Photo of Helen Whately Helen Whately The Exchequer Secretary

The Government maintains a reduced rate of VAT of 5 per cent on the installation of many Energy Saving Materials, subject to certain conditions.

Going further would impose additional pressure on the public finances, to which VAT makes a significant contribution. VAT raised around £130 billion in 2019/20, and helps to fund key spending priorities, including on health, education, and defence.

The Government keeps all taxes under review.

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