Last updated: August 2026, based on current HMRC guidance in VAT Notice 708/6.
If you are thinking about a heat pump for your home, the VAT position is worth understanding before you book. Right now, qualifying air source heat pump installations in UK homes carry 0% VAT. From 1 April 2027 that rises to 5%, so the timing of your install changes what you pay.
This guide explains what the 0% VAT covers, who qualifies, how long it lasts, and how much installing before the deadline could save you.
If you are ready to look at options, see our guide to air source heat pump installation across Brighton, Hove and Sussex.
Quick summary
- Qualifying air source heat pump installations in homes are 0% VAT until 31 March 2027
- From 1 April 2027 the rate rises to 5%
- The relief covers supply and installation together, not equipment bought on its own
- Portable or moveable units do not qualify
- On a £5,000 install, waiting until after the deadline would add around £250 in VAT
What is the 0% VAT on heat pumps?
The government applies a temporary zero rate of VAT to the installation of certain energy-saving materials in homes. Air source heat pumps are on that list, which means the VAT on a qualifying installation is currently 0% rather than the standard 20%.
The key word is installation. The relief applies when a heat pump is supplied and fitted together as one job in residential accommodation. You do not claim anything yourself. The installer applies the correct VAT treatment on the invoice for a qualifying job.
How long does the 0% VAT last?
The zero rate is a fixed window. It runs until 31 March 2027, and from 1 April 2027 it reverts to a reduced rate of 5%. It does not disappear after that, but it does become more expensive.
In practice, that means the work needs to be completed while the zero rate applies. If you are weighing up a heat pump, the sensible plan is to get quotes in good time rather than leaving it close to the deadline, when installers tend to be busier.
How much could you save before the deadline?
VAT after the deadline is charged at 5% of the installed price, so the saving grows with the size of the job. The figures below are illustrative, to show the difference the timing makes.
| Installed price | VAT if you install now (0%) | VAT from 1 April 2027 (5%) |
|---|---|---|
| £1,500 single unit | £0 | £75 |
| £5,000 multi-room system | £0 | £250 |
| £10,000 whole home system | £0 | £500 |
Tip: Ask for a written quote that shows the VAT treatment, so you can see the zero rate applied to your job before you commit. You can also see typical installation costs to get a feel for the numbers first.
What qualifies for 0% VAT, and what does not
Not every purchase counts. The relief is designed around fixed systems installed in a home, so the distinction is usually clear once you know what to look for.
What qualifies
- A fixed air source heat pump, including an air-to-air system that both heats and cools
- Supplied and fitted together as a single installation
- Installed in residential accommodation, which for most people means their home
What does not qualify
- Portable or plug-in units you can move around
- Buying the equipment on its own, with no installation
- Work that falls outside qualifying residential property
If you are comparing options, our overview of air-to-air heat pump installation explains how one system can handle both heating and cooling.
Does the 0% VAT apply to me?
For most homeowners, yes. The relief applies to qualifying installations in homes in the UK, so if you are having a fixed heat pump supplied and fitted in your house, it should fall within the zero rate while the window is open.
There are always specific cases, for example mixed-use buildings or unusual property types, where the position needs checking. That is something a good installer will confirm at the survey stage rather than leaving to guesswork.
How to make sure you get the 0% rate
- Use an installer who both supplies and fits the system, so it is treated as one installation
- Plan the work to be completed before 31 March 2027
- Ask for a quote that clearly shows how VAT has been applied
At Eaglereach, we install air source heat pumps for homes across Brighton, Hove and the wider Sussex area, and we apply the current 0% VAT to qualifying work. Not sure what you need yet? You can work out the right size for your rooms first.
Disclaimer
This guide is general information, not tax advice. VAT treatment depends on your circumstances and the specific work being carried out. The rules are set by HMRC in VAT Notice 708/6 and can change. For anything specific to your situation, check the current guidance on gov.uk or speak to your installer or accountant. We confirm what qualifies at your site visit.
FAQs about 0% VAT on heat pumps
Is VAT really 0% on heat pumps right now?
Yes. Qualifying air source heat pump installations in homes are zero rated for VAT until 31 March 2027.
What happens after 31 March 2027?
From 1 April 2027 the rate rises to a reduced rate of 5%. On a £5,000 install that is around £250 more than during the zero-rate window.
Does the 0% VAT cover the equipment on its own?
No. It applies to supply and installation together. Equipment bought on its own, without installation, is standard rated.
Do I need to do anything to claim it?
No. There is nothing to apply for. The installer applies the correct VAT rate on a qualifying job, and it should be shown on your quote and invoice.
Does it apply to air conditioning that also heats?
An air-to-air heat pump that heats and cools can qualify when it meets the conditions and is installed in your home.
Ready to talk it through? Contact us for a free, no obligation quote across Brighton, Hove and Sussex.
