0% VAT for Domestic Air Conditioning Systems

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Chancellor scraps the VAT on heat pumps…

Exciting news emerges for the AC industry as the 2022 Chancellor’s Spring Statement reveals that homeowners who have energy saving building solutions installed in their homes, such as heat pumps, no longer need to pay VAT.

The changes will take effect from April 2022 and will last five years, providing benefit to both homeowners and contractors in the industry.

If you’re looking for home air conditioning, 0% VAT means there has never been a better time.

Predicted increase in demand…

With the current hot topic of rising energy prices, and the government’s zero emissions goal for 2050, we predict that this will boost the market for energy saving, low carbon heat pumps that not only offer a viable, cost effective and sustainable heating solution during the winter months but can also provide welcome relief from the soaring summer temperatures.

With low running costs and high efficiency, the purchase of an AC system to heat and cool your home, is a decision that is easy on your pocket and on the planet, as we all have a part to play in helping to reach the UK’s climate goals.

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The rules on installation on energy saving materials…

The rules of qualifying installations have also been simplified considerably alongside the cuts. In the past, systems used to cool were not eligible for the reduced rate. Now, as long as the system can provide heating in addition to cooling to a domestic property, it is eligible for the scheme.

Prior to April 1st 2022, there was a ‘60% test’ in place which has also been abolished. The ‘60% test’ was implemented by HMRC. This would limit the reduced VAT rate where materials exceeded 60% of the total cost charged to the customer.

Resellers of air conditioning units without the installation service must continue to charge 20% VAT.

The scheme does not apply to portable systems and is set to run from April 2022 to March 2027.

You can read the full notice on the government website here.

Are air conditioning systems classed as heat pumps? …

Most air conditioning systems are considered as heat pumps due to the fact they can provide heating and cooling. Otherwise known as air-to-air heat pumps. Modern day gasses (R410a and more recently R22) have higher pressure and produce more heating power. Modern day technology means that air conditioning heating is now extremely efficient. Read more on how air conditioning works here.

What are ESMs?

ESMs is simply an abbreviation of Energy Saving Materials. Energy saving materials are products and/or systems that use as little electricity, gas, etc. as possible, or help to reduce their use. They lower the impact we have on our environment, which is why the government is providing incentives for us to install them. ESM’s come in different forms but they can be divided into groups as follows:

  • Controls for central heating and hot water systems
  • Draught stripping
  • Solar panels
  • Ground source heat pumps
  • Air source heat pumps

The government has recently introduced a zero rate for installation on the following ESMs…

  • Controls for central heating and hot water systems
  • Draught stripping
  • Insulation
  • Solar panels
  • Ground source heat pumps
  • Air source heat pumps
  • Micro combined heat and power units
  • Wood-fuelled boilers
  • Wind turbines
  • Water turbines

Why has 0% VAT for air conditioning installation been introduced?

The government has plans to drastically reduce domestic carbon emissions and this is all part of the wider net zero objective that we have already discussed. They have scrapped the previous complicated VAT rate scheme on certain specified energy saving materials, replaced it with a zero rate of VAT. 

 It is anticipated this money saving move will incentivise homeowners to take-up ESMs such as heat pumps (and this includes most air conditioners).

Can I get a grant to install air conditioning?

The government has introduced grants to encourage homeowners to install low carbon heating systems such as heat pumps, including most air conditioners, through the Boiler Upgrade Scheme (BUS). This scheme will “help property owners overcome the upfront cost of low carbon heating technologies”. This only applies to installations after April 2022.

To find out if your installation meets the criteria for a BUS grant there is more information on the GOV.UK website.

Where to go for AC advice ...

There are many different options to choose from, so it is important that you contact a specialist installer, who can advise you on which type and brand of air conditioner is best for your individual requirements and budget.

Evergreen provide AC services to suit all budgets and applications. For expert advice on installation, maintenance, or emergency repair of an AC system in your home please contact our specialist team.

Do I need planning permission for air conditioning?

One of the most common questions asked by consumers when considering air con for their home is if they need planning permission.

In this article we will walk you through the current legislation and regulations to ensure you are compliant when you have your air conditioner installed. 

What is planning permission?

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Simply put, applying for Planning Permission, is putting in a request to the authorities to see whether you can legally carry out building works, or alterations, to your property.

Once your application has been reviewed by your local planning authority It will be granted (perhaps subject to certain conditions) or refused.

It is essential that you do not carry out any works until you have secured planning permission, or have established that you do not need it, otherwise you could be served with an Enforcement Notice with is a legal order to undo any changes you have made to your property.

Do you need planning permission to install domestic air conditioning?

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In most instances, as long as you adhere to the permitted development regulations, it is not a requirement in domestic settings unless you are installing in one of the following areas …

If you have any doubt about your legal position with regards to installing an air conditioning system to your property we would advise you to contact your Local Planning Authority.

In most instances, as long as you adhere to the permitted development regulations, it is not a requirement in domestic settings unless you are installing in one of the following areas …

If you have any doubt about your legal position with regards to installing an air conditioning system to your property we would advise you to contact your Local Planning Authority.

What about air conditioning for Listed Buildings or in Conservation Areas?

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A Listed Building will need Listed Building Consent and a property within a Conservation Area will need planning permission before being able to the install an air conditioner. This is a legal requirement. 

There are often restrictions in place when it comes to alterations that are likely to affect the character or fabric of a Listed Building, or spoil the appearance of a Conservation Area, and this can mean in some cases that a traditional external condenser unit cannot be installed. 

It is worth bearing in mind that planning requests can take anywhere from 6-14 weeks (in some cases longer) to be processed, so be sure to get your application in during the colder months if you want your air conditioner to be up and running in the Summer. 

Your specialist installer would be happy to discuss different options with you so that your application is likely to be looked upon favourably by your local authority.

What are the air conditioning installation guidelines I should be aware of?

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There are some important regulations that need to be adhered to when you are deciding where to install your air conditioner. As we mentioned earlier, failure to comply with guidelines and regulations could lead to you being forced to undo any changes you have made to your property. 


Modern technology means that the noise created by external units are minimal. However, you should still be considerate towards neighbours and surroundings.

Legislation says that air conditioning units must not exceed 5 decibels above the ambient background noise level measured at any property boundary at peak hours. 

Complaints from neighbours and members of the public may result in your unit having to be removed. You may wish to consider some sound proofing such as fences and hedges to keep noise disturbance to a minimum. 

Space and boundaries

Always ensure your outdoor AC unit is installed more than a metre away from any property boundaries. It must not be positioned within metre of the edge of a flat roof. 


The volume of the external unit must not exceed 0.6m³

Roof installation

It is advised not install your outdoor unit on a pitched roof, otherwise you may have to consult your local council. 

Wind Turbines

No wind turbines to be located on the same building or within the curtilage of the building where the AC system is to be installed. (The curtilage of a building or house is the land immediately surrounding it, including closely associated buildings.)

What other air conditioning regulations do I need to be aware of?

If you’re having an air con system fitted in your home, it is very unlikely that you’ll need to file a planning application or worry about legislation (unless your property is listed or located in the restricted areas mentioned above). Your installer should be equipped with this knowledge and highlight anything you need to consider. 

Commercial buildings are separate when it comes to regulations, and there are certain requirements which must be adhered to, to ensure you are within government guidelines:

  • F-Gas 

Records must be kept by the building owners/occupiers and systems must be regularly maintained 

  • EPC 

By law, all commercial buildings that have over 500m2 if habitable space must hold an energy performance certificate 

  • TM44 

All commercial building owner/occupiers that have an AC system must undergo regular inspections by accredited professionals to ensure their system(s) are running efficiently. 

Where do I go for advice?

If you are still unsure whether you need to submit a planning application to install an AC system to your property it would be worth contacting your local authority for advice to ensure you are fully compliant. 

It is also worth enlisting the help of an AC contractor that is knowledgeable and experienced. Get in touch with our specialist team at Evergreen, we are on hand to offer free advice on any aspect of AC installation.