The Government has announced that you do not need to pay VAT on any external wall insulation, if you use a VAT registered Installer!
With rising energy bills and more people being impacted by energy poverty, there has never been a better time to insulate your home.
In this blog, we will look at how 0% VAT could benefit you!
How does 0% VAT save you money?
0% VAT significantly lowers the overall cost of installing External Wall Insulation, saving you money in the short and long term.
For example, let’s look at an external wall insulation installation that costs £7,500. Under previous reduced VAT rules, installers were able to charge a reduced rate of 5% to this. So the customer would be required to pay a total of £7,875. (£7,500 x 1.05).
However, after the Treasury’s announcement today, the job would now have zero VAT and therefore cost £7,500, a total saving of £375!
How can External Wall Insulation save you money in the long run?
We have spoken about short-term savings but now let’s look at how EWI can save you money in the future.
Installing EWI can massively reduce your energy bills. If you install 90mm of insulation to the exterior of your property as solid wall insulation, it can typically reduce your heating energy bill by up to 50%!
As energy prices continue to rise, year on year savings will continue to get bigger.
This will play a massive part in reducing energy poverty for thousands of households across the UK.
What is energy poverty?
The term ‘energy poverty’ is being more common, but does it mean?
The term energy poverty is a reference used when someone cannot keep their home adequately warm. This can be from a combination of reasons, mainly due to high expenditure of disposable income on energy and poor energy efficiency.
Due to the rising energy bills, more and more people are falling into energy poverty.
Nick Miles, commercial director of EWI Pro External Wall Insulation systems commented today ‘We are delighted that the Government is beginning to recognise the importance of energy-saving measures in this country. We are hopeful our EWI Pro external wall insulation systems will save homeowners £’000s on heating bills over the coming years’.
How can I find a trusted & approved local Installer?
It is worth noting that not all installers of external wall insulation systems are VAT registered. However, due to the size of the contracts, it is rare to come across companies who are installing EWI products on a full-time basis who don’t have to charge VAT.
If you would like to find an EWI Pro registered installer in your local area, you can find more information here!
There has never been a better time to install external wall insulation! Take advantage of the Governments generous zero percent VAT while you still can.
Find out more!
If you would like to find out what materials you need to start rendering and insulating your home. Read one of our helpful buyers guides or speak to one of our representatives on 0203 0340022.
If you would like to read more on the increasing energy prices, check out our blog on ‘High energy bills? Cut energy costs with loft insulation and external wall insulation.’
16 thoughts on “0% VAT on External Wall Insulation for Homeowners!”
so if you are installing it yourself as you cannot afford to pay someone how do you get the materials vat free?
it defeats the purpouse if you have to pay someone £5k to install to save £375 in vat??
You can claim VAT on any home improvement as long as completed by the home owner. You need to fill in a form and send it to hmrc. The firm is called VAT431NB. Hope that helps
As far as I know VAT431NB only applies to DIY new builds or DIY conversions. It doesn’t apply to renovation or extensions to existing domestic properties (unless the extension or other works creates a separate individual dwelling which isn’t internally connected to the original one).
Hi Phil,
It is a skilled trade – so we would suggest paying someone who knows what they are doing!
If you are wanting to give it a try yourself, we recommend going on one of the training courses run by our friends at EWI Pro – https://ewipro.com/training/
Im but i have to agree with the original comment. As someone that has built many homes and inspects buildings now for thermal performance I can be quite confident saying the industry standard for insulation requires ZERO skill BUT requires attention to detail. A skill is something that requires months or years of practice to perfect.
A homeowner installing insulation in their loft for example more likely to do it to detail than the 16yr old apprentice on minimum wage that normally gets the short straw to do that job.
EWI requires, tools and again attention to detail but the rendering is the only skilled trade required.
The zero vat should be available to all home owners to install insulation for a specific task, both DIY or using contractors. Once again this is another scheme that sounds great but only benefit the people with bigger projects or wealthy enough to pay a contractor.
From 5% down to 0% VAT when it comes to installation, apparently but what of the 20% VAT still being levied on materials?
My reading of it is that it’s 5% on materials and labour, as long as the former is less than 60% of the costs of the overall job. I’m with the view above though that insulation should just be 0% Vat rated at purchase so that you can install it yourself if appropriate and still benefit. The point about attention to detail being something that householders have in abundance with regard to their own property is a good one. I insulated and boarded out my loft last year and I’m 100% confident that I did a much more meticulous job of it than some bored bloke looking forward to getting home – let alone the cost savings on labour. It’s a shame that the government haven’t taken this into consideration, given fuel poverty and the parlous state of many UK properties with regard to energy conservation, but of course, they’re all so rich that they don’t have to worry about money or DIY anyway 🙁
While I would have had no issue doing this myself a few years ago. I have come to recognise that I no longer have the energy to be, climbing ladders and lumping plaster around around. I think the labour cost would be far outweighed by the savings to my not having aches and pains.
I’m at the research stage of external wall insulation. On Youtube there are some great videos with a plain-speaking man called Roger Bisby and with the Skillbuilder title. He shows the different stages of work: priming the surface, fixing insulation boards with adhesive and solid fixings, fibreglass mesh etc. Many DIY people could do those jobs with time, patience and (for ground floor + 1st floor) with scaffolding. Maybe the final render is the most skilled work because it’s visible and it’s apparently just 1mm thin.
I’m hoping to raise a rental property from band D to band C of an Energy Performance Certificate. Does anyone know whether EWI (external wall insulation) has much influence on the EPC rating?
Hi John, yes external wall insulation can improve a building’s Energy Performance Certificate (EPC) rating by reducing heat loss through the building envelope. The insulation acts as a barrier to heat flow, reducing the amount of energy required to heat the building and thus lowering its carbon emissions.
Any thoughts on this?
We have comprehensively refurbished a 1960s bungalow with new insulation incorporated into the floor, existing walls and roof. The refurb has utilised the existing foundations, outer walls and roof structure but has resulted in new external finishes to the walls and roof. HM Govt’s VAT note initially suggests that the VAT related to the supply and installation of the insulation should be zero-rated but then goes on to say:
‘However, if you replace your existing roof with a new insulated one, the insulation clearly is a better way of enjoying the new roof and so the insulation is ancillary to the new roof. As the supply of the roof is standard-rated, this applies to the whole supply, including the insulation.’
Surely if the Govt wants us to get to net-zero, this seems counter-productive.
Is there any experience or advice out there to help us get this considerable cost element zero-rated?
Thanks
Hi Tony, if you are refurbishing with insulation the labour + materials in totality can be zero-VAT rated, Plus any ancillary works. You would have to check with the individual contractor’s commercial terms to get that invoice VAT split visibility
Hi
As a scaffold company do I still charge the home owner / customer vat on top of my scaffold or is this also vat free ?
Hi Chris, scaffolding services typically fall under the standard VAT rate. However, there are exceptions, such as work on new buildings or services supplied under specific government schemes, which might be charged at a reduced rate or be zero-rated. We would definitely recommend clarifying with HMRC or a tax professional.
I’ve heard that wall insulation can sometimes cause damp which in my mind would be worse -why does this happen and how can you assure this does not happen?
Hi Maggie, insulation causing damp is a bit of a misconception; damp can occur when the insulation is not installed correctly. If the whole wall is not sealed correctly, water can get in or cold air can cause condensation. Many systems are also breathable which allows them to deal with any potential condensation.