When Does 0% VAT on Heat Pumps End? What 1 April 2027 Means for Your Install
When Does 0% VAT on Heat Pumps End? What 1 April 2027 Means for Your Install
When does 0% VAT on heat pumps end? Does 0% VAT on heat pumps end in March 2027? Yes. The zero rate of VAT on qualifying heat pump installations ends on 31 March 2027. From 1 April 2027, the same installations revert to the 5% reduced VAT rate, unless the government changes the law before then. For off-gas-grid homes replacing oil or LPG heating, the higher £9,000 Boiler Upgrade Scheme grant drops back to £7,500 on the very same date. Together, the two deadlines could add roughly £2,000 to the out-of-pocket cost of a typical install. This guide explains exactly what ends, what does not, and how to beat both deadlines.
When Does 0% VAT on Heat Pumps End?
The temporary zero rate of VAT on energy-saving materials runs in Great Britain from 1 April 2022 to 31 March 2027 (it was extended to Northern Ireland from 1 May 2023). From 1 April 2027, qualifying installations revert to the 5% reduced rate. That end date is written into the law that created the relief, the Value Added Tax (Installation of Energy-Saving Materials) Order 2022, and it was confirmed in HMRC’s VAT Notice 708/6, updated 31 January 2024. In other words, this is not a new tax being introduced. It is a temporary relief reaching its planned end date, and unless the government announces a change, the rate simply moves from 0% to 5% for installations that fall after the deadline. Swift VAT Pro’s 2026 UK guide and FitSolar’s explainer both confirm the same dates against the HMRC guidance.
Which heat pump installations qualify for 0% VAT?
The relief covers air source, ground source and water source heat pumps, when a business supplies and installs them in residential accommodation. It applies to the installation as a whole, not just the equipment: if the installer fits new radiators alongside your heat pump, or does preparatory work in aid of the install, that work is covered too. This is the position set out in the Federation of Master Builders’ 0% VAT explainer.
A few things the relief does not cover, and they matter:
- DIY installs. If you buy a heat pump yourself and fit it, you cannot claim 0% VAT. The relief only applies when a business does the installation.
- Mixed single-supply jobs. If energy-saving work is a minor part of a much bigger job quoted as one price, such as fitting insulation while putting on a completely new roof, HMRC can treat the whole job as a single standard-rated supply. As a rule of thumb, if the installation of the energy-saving product is not the sole purpose of the work, the zero rate may not apply.
- Certain products outright. EV chargers and double glazing are not on the qualifying list, and business premises are mostly excluded.
The same 0% rate also covers solar panels, battery storage, insulation, wind and water turbines and smart diverters, so a combined solar-plus-heat-pump project benefits across the board until the deadline. Grant Store’s 2027 VAT guide walks through the same product list.
The £9,000 grant uplift ends on the same day
The second deadline is the Boiler Upgrade Scheme’s off-gas-grid uplift. Right now, the scheme pays £9,000 towards an air source or ground source heat pump for homes off the gas grid that are replacing oil or LPG heating, up from the standard £7,500. According to Ofgem’s installer guidance, that higher rate runs from 21 July 2026 to 31 March 2027. After that, eligible off-gas-grid installs drop back to £7,500. The uplift applies only to air-to-water and ground source heat pumps, not to air-to-air systems (£2,500) or biomass boilers (£5,000). Infinity Energy’s 2026 BUS guide and Kilowiq’s off-gas-grid guide both confirm the dates and the qualifying conditions.
Two things worth keeping straight. First, the grant is applied for by your MCS-certified installer through Ofgem and comes straight off your quote, so there is nothing to claim back yourself. Second, the scheme itself is not ending in March 2027: the standard £7,500 rate runs on, with funding in place through 2029/30. Only the £9,000 uplift for oil and LPG homes expires. We covered the separate question of whether the Budget could cut the scheme itself in our Autumn Budget piece, but whatever ministers announce on 28 October, the 31 March 2027 VAT deadline stands unless they legislate otherwise.
What waiting actually costs: a worked example
The two penalties are separate, and they stack. Losing the uplift costs you £1,500 of grant. Losing the zero VAT rate adds 5% to the installation price the grant comes off. Here is what that looks like as an illustrative example, not a quote:
- Installed before 31 March 2027: £12,000 install at 0% VAT, minus the £9,000 grant = £3,000 out of pocket.
- Installed from 1 April 2027: the same £12,000 install at 5% VAT = £12,600, minus the standard £7,500 grant = £5,100 out of pocket.
That is a £2,100 difference for the same system, purely from timing. Your own figures will differ: ask your installer to show the grant and the VAT as separate lines on the quote so you can see exactly what each deadline changes for your home.
Could the deadline be extended?
As of September 2026, no extension had been announced, according to the House of Commons Library. The Autumn Budget on 28 October 2026 is the next moment when ministers could announce a change, but the Department for Energy Security and Net Zero has confirmed nothing, and speculation so far has centred on grant funding, not the VAT relief. The safest reading is the literal one: the zero rate ends on 31 March 2027 because that is what the law says, and planning around an extension that may never come is how people end up paying 5%.
How to beat both deadlines
If you are weighing up a heat pump, work backwards from 31 March 2027:
- Get a survey now, not in February. A proper heat loss survey takes weeks to arrange and the install itself takes weeks more. Starting now leaves margin for the things that always slip.
- Use an MCS-certified installer. Only MCS-certified installers can apply for the Boiler Upgrade Scheme on your behalf, and using one is what unlocks both the grant and the zero VAT rate.
- Get the VAT and grant shown separately on your quote. With 0% VAT and the £9,000 grant both on the table, you want to see both lines before you sign.
- Get the expected completion date in writing. The VAT rate that applies depends on when the supply is made for VAT purposes. If your job risks straddling April, your installer should be able to tell you which side of the deadline it falls on, so get that in writing.
- Do not wait for an EPC. There has been no EPC requirement for the Boiler Upgrade Scheme since 28 April 2026; a recent energy bill and photos count as evidence where a home has none. A missing EPC is not a reason to delay.
One last reassurance: the standard £7,500 Boiler Upgrade Scheme grant continues after March 2027, so heat pumps do not suddenly become unaffordable. What ends is the double sweet spot of the highest grant and zero VAT together. For an oil or LPG home off the gas grid, that combination is worth around two thousand pounds, and it has a fixed expiry date.
Frequently asked questions
When does 0% VAT on heat pumps end?
When does 0% VAT on heat pumps end? The zero rate of VAT on qualifying heat pump installations ends on 31 March 2027. From 1 April 2027, the same installations revert to the 5% reduced VAT rate, confirmed in HMRC’s VAT Notice 708/6 and the legislation behind it.
Does 0% VAT apply to the whole installation or just the heat pump unit?
The whole installation. When a business supplies and installs a qualifying heat pump in a home, the zero rate covers the equipment, the labour and ancillary work done in aid of the install, such as radiators fitted alongside the heat pump.
Will the £7,500 Boiler Upgrade Scheme grant also end in March 2027?
No. Only the £9,000 uplift for off-gas-grid oil and LPG homes ends on 31 March 2027. The standard £7,500 grant for air source and ground source heat pumps continues, with scheme funding in place through 2029/30.
Can I get the 0% VAT rate if I buy the heat pump myself and install it?
No. The relief requires a business to do the installation. Materials bought without installation, and DIY installs, do not qualify for the zero rate.
What happens if my installation finishes after 31 March 2027?
The VAT rate that applies depends on when the supply is made for VAT purposes, so a job that straddles April may lose the zero rate. Ask your installer to confirm the expected completion date and the VAT treatment in writing before you sign.
Is the 0% VAT relief only for heat pumps?
No. It covers a list of energy-saving materials including solar panels, battery storage, insulation, wind and water turbines, heating controls and smart diverters, when installed in residential accommodation.
Sources
- Federation of Master Builders, 0% VAT measures on energy efficiency installation, fmb.org.uk
- FitSolar, Solar Panel VAT Rise April 2027, fitsolar.energy
- Grant Store, Solar Panel VAT: 0% Relief Ends 31 March 2027, grant-store.com
- Swift VAT Pro, VAT on Building Work: 0%, 5% or 20%? (2026 UK Guide), swiftvatpro.co.uk
- Infinity Energy, Boiler Upgrade Scheme 2026: Heat Pump Grants Explained, infinity-energy.co.uk
- Kilowiq, Heat Pump for Homes Off the Gas Grid: Replacing an Oil or LPG Boiler (2026), kilowiq.com
- UKEM Group, Boiler Upgrade Scheme: Up to £9,000 Off Heat Pumps, ukem.co.uk
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