What Is The Correct VAT Rate For Air Conditioning?

Wondering what the VAT rate is for Air Conditioning?

Until 1st October 2019 it was possible to apply 5% VAT to Domestic / Residential Air Conditioning, as long as it was a Heat Pump type.


HM Revenue and Customs have withdrawn their reduced VAT rate for domestic heat pump installations. The 5% rate that was previously applicable for Energy-Saving Materials has now been increased to the standard VAT rate of 20%.


It's worth checking with your Installer yo see what rate they apply, as if it is incorrect, they may be able to claim the difference from you, in the event that they are inspected by HMRC, in particular if they have E & O.E. included in their Commercial terms.


We regularly find ourselves quoting against Installers who still think the the 5% rate is applicable for these projects, so buyer beware.