The Treasury has declared that all battery storage systems are now exempt from VAT, offering a 20% cost reduction and extending the relief to grid-connected batteries.
This move aims to facilitate greater adoption of energy-saving materials (ESMs), aligning with the government’s goal of reaching net zero emissions by 2050.
The government has acknowledged the positive response from the energy sector following the expansion of VAT relief on ESMs, announced during Spring Statement 2022.
Last year’s reforms simplified consumer access to the relief, zero-rated qualifying ESMs for VAT purposes and broadened the scope of eligible materials.
Set to take effect on 1st February 2024, these permanent reforms apply across the entire UK, following the Windsor Framework.
