Air Conditioning Installations Currently Qualify for 0% VAT in the UK
The government has introduced a temporary VAT relief scheme designed to encourage the installation of energy-efficient heating technologies, including heat pumps.
Because modern air conditioning systems are air-to-air heat pumps capable of both heating and cooling, they can often qualify for this scheme.
This means homeowners in Surrey & South London can currently save 20% on the cost of air conditioning installation – but the scheme is only available until 31 March 2027.
What is the 0% VAT Heat Pump Scheme?
The UK government reduced VAT to 0% on certain energy-saving materials to encourage more efficient heating systems and reduce reliance on fossil fuels.
The ‘VAT Relief for Energy-Saving Materials’ scheme applies to technologies including:
- Air-source heat pumps
- Ground-source heat pumps
- Solar panels
- Insulation upgrades
- Some energy-efficient heating controls
Because air conditioning systems use the same heat-pump technology, installations that provide heating as well as cooling fall within the same category of energy-saving equipment.
Why Does Air Conditioning Qualify for 0% VAT?
Modern air conditioning systems are reversible heat pumps.
This means they can:
- Cool your home in summer
- Heat your home in winter
- Improve energy efficiency
- Reduce reliance on gas heating
In heating mode, these systems extract heat from outside air and transfer it indoors – the same principle used by air-source heat pumps.
As a result, installations that include heating capability qualify for the 0% VAT energy-saving materials relief.
What This Means for Homeowners
Under the current scheme, homeowners can benefit from:
- 0% VAT on qualifying installations
- Lower upfront installation costs
- More efficient heating and cooling
- Reduced reliance on expensive gas heating
- Improved year-round comfort
In simple terms, the government is currently subsidising part of the cost of upgrading to a more efficient climate control system.
How Long Does the 0% VAT for Energy-Saving Materials Scheme Last?
The current 0% VAT rate is scheduled to run until 31 March 2027.
After this date, VAT is expected to return to the standard rate unless the policy is extended.
That means installations carried out before this deadline can benefit from significant savings.
Why Many Homes Are Switching to Air Conditioning
As UK summers become hotter and winters wetter, more homeowners are installing air conditioning systems that provide:
- Cooling during heatwaves
- Efficient heating in winter
- Improved humidity control
- Lower running costs compared with traditional electric heating
Combined with the current 0% VAT incentive, installing air conditioning has become far more affordable than many people realise.
Is Your Property Eligible?
Eligibility depends on the type of system installed and whether it qualifies as an energy-saving heating technology.
The easiest way to confirm this is to speak with an experienced installer who understands the requirements of the VAT relief scheme.
Take Advantage of 0% VAT on Air Conditioning While it Lasts
With the current scheme scheduled to end in March 2027, now is an excellent time to consider installing a modern air conditioning system that provides both heating and cooling.
You can improve your home’s comfort, reduce reliance on gas heating, and potentially save 20% on installation costs while the incentive is still available.
Interested in Installing Energy-Efficient Air Conditioning in Your Home?
Our experienced air conditioning engineers can advise on systems that provide both heating and cooling and explain how the 0% VAT scheme may apply to your air conditioning installation.
Looking for an air conditioning company in Surrey? Contact RC Cooling today to arrange a consultation.