# The Value Added Tax (Installation of Energy-Saving Materials) Order 2024, Article 2: Installation of energy-saving materials from 1st April 2027


(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.”.

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Source: https://www.legislation.gov.uk/uksi/2024/24/article/2 (the official version)
Page: https://openlegislation.uk/value-added-tax-installation-of-energy-saving-materials-order-2024/article-2
Contains public sector information licensed under the Open Government Licence v3.0. Source: legislation.gov.uk, The National Archives.