HMRC is consulting on updated draft legislation to amend the scope of the VAT relief for the installation of energy-saving materials (ESMs) in residential accommodation.

The proposed amendments will:

  • maintain the reduced rate on installations of ESMs in residential accommodation for recipients who are aged 60 or over or receiving certain benefits, and for housing associations;
  • remove the reduced rate for the installation of wind and water turbines; and
  • maintain the reduced rate for all other installations in residential accommodation where the cost of the materials does not exceed 60% of the total cost of installation.