Air Conditioning & VAT

Working with air conditioning units?

Are you a builder, electrician, Gas Safe installer, renewables engineer or a registered installer, repairer or supplier of air conditioning units?  Did you know that air conditioning units are eligible for reduced rate VAT if they’re supplied for a qualifying use?  Here we will explain the basics of how the reduced rate of VAT could apply to you, your business and your customers!

The government is keen to encourage energy efficiency as part of the Climate Change Programme and the Kyoto Protocol. With residential properties accountable for a quarter of all energy emissions, the only way for the UK to meet its obligations under Kyoto is for the government to encourage the uptake of lower cost, energy-saving solutions, including air source heat pumps and other air conditioning and refrigeration units.  HMRC has decided that one way to help consumers make the right choice is to provide a tax incentive in the form of reduced VAT on modern air conditioning and refrigeration units, such as air source heat pumps to residential customers.