Reduced VAT on Residential A/C Installations
As part of its commitment to reducing the emission of gases responsible for global warming, the Government has introduced a reduced VAT rate of 5% on residential installations. This VAT reduction incentive only applies where Air Conditioning Heat Pumps are both sold AND installed by the one provider, within residential properties.
The Governments intention is to encourage the use of such energy efficient products (heat pumps), which will have a positive effect in reducing carbon emissions.
If Celsius were to supply a residential client a “Celsius Solo” all-in-one heat pump air conditioner for self installation, its list price of £1,150.00 would attract the standard rate of VAT – 15%, totalling £1,322.50. However, if Celsius supply and install the Solo, the list price would be £1,350.00 but with the lower rate of 5% VAT applied, this totals £1,417.50
For the supply and installation of a standard heat pump wall mounted split system priced at say £1,250.00, instead of the standard 15% VAT rate (totalling £ 1,437.50), the lower 5% VAT rate would reduce this to £1,312.50, giving a saving of £125.00
When you consider that the electrical consumption of the example heat-pump systems above are less than a quarter of that consumed by any other form of electric heating, the savings (both short and long-term) are obvious, but in addition to heating your home efficiently, you gain the added benefit of cooling it during the summer months.