Businesses that provide and install certain energy saving materials (ESMs) in Northern Ireland will be able to apply the zero rate of VAT from 1 May 2023. 

The temporary zero rate for the installation of ESMs was introduced in Great Britain from 1 April 2022 until 31 March 2027. The government stated at the time that this could not be applied in Northern Ireland under the terms of the Northern Ireland protocol. 

Now that the UK government has ratified the Windsor Framework, the zero rate can be extended to Northern Ireland with effect from 1 May. This will reduce the VAT rate on these installations in Northern Ireland from 5% to 0%. 

Consistent with the change introduced in Great Britain, the scope of the relief has been widened to include wind and water turbines. Certain eligibility criteria that previously applied in Northern Ireland under EU rules has also been removed. 

In addition to this change, the government is currently consulting on further extending the VAT relief for energy saving materials. 

Further reading: 

• The Value Added Tax (Installation of Energy-Saving Materials) Order 2023 - GOV.UK (www.gov.uk)