Further to the ratification of the Windsor Framework, the zero rate for the installation of energy saving materials announced at Spring Statement 2022 will be extended to Northern Ireland from 1 May 2023.

Businesses that provide and install certain energy saving materials (ESMs) in Northern Ireland will be able to apply the zero rate of VAT from 1 May 2023. 

The temporary zero rate for the installation of ESMs was introduced in Great Britain from 1 April 2022 until 31 March 2027. The government stated at the time that this could not be applied in Northern Ireland under the terms of the Northern Ireland protocol. 

Now that the UK government has ratified the Windsor Framework, the zero rate can be extended to Northern Ireland with effect from 1 May. This will reduce the VAT rate on these installations in Northern Ireland from 5% to 0%. 

Consistent with the change introduced in Great Britain, the scope of the relief has been widened to include wind and water turbines. Certain eligibility criteria that previously applied in Northern Ireland under EU rules has also been removed. 

In addition to this change, the government is currently consulting on further extending the VAT relief for energy saving materials. 

Further reading: 

VAT at 50 – where next? 

ICAEW’s Tax Faculty is hosting a full-day conference to mark the 50th anniversary of the introduction of VAT in the UK. The conference will briefly reflect on VAT’s evolution since 1973, but will focus on exploring the future of the tax over the next five to ten years. One theme of the conference will be sustainability, focusing on how VAT can be used as a tool in the government’s net zero strategy. 

Book your space  

ICAEW’s Tax Faculty is recognised internationally as a leading authority and source of expertise on taxation. The faculty is the voice of tax for ICAEW, responsible for all submissions to the tax authorities. Join the Faculty for expert guidance and support enabling you to provide the best advice on tax to your clients or business.


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