Guide · 3 min read
0% VAT on air conditioning, explained
Which residential supply-and-fit jobs qualify for the zero rate, which do not, and what happens at 20%.
What the relief covers
UK VAT relief on energy-saving materials currently zero-rates the installation of qualifying air source heat pump equipment in residential accommodation, when the same supplier both supplies and installs it. A reverse-cycle air conditioning system that heats as well as cools falls in scope. The relief is legislated to run to 31 March 2027, after which the reduced rate is scheduled to return.
Typically qualifies
- Reverse-cycle (heating and cooling) systems in a home you live in or let residentially
- Supplied and installed together by us, on one invoice
- Materials fitted as part of that same installation
Typically does not qualify
- Cooling-only equipment
- Offices, shops and other commercial premises — 20%
- Supply-only orders, or fitting a unit you bought elsewhere
- Repairs, servicing and refrigerant top-ups
How we apply it
The builder asks the questions that decide the treatment and shows the rate on the quote before you book. We do not apply a zero rate we cannot defend in an inspection — if the job is borderline it goes to 20% and we tell you why. This is a plain-English summary, not tax advice.