Last reviewed: 3 September 2026. This page is re-checked
after every Budget and Spring Statement, because the date can move. If you are reading it after March
2027 and it still says the same thing, that is a bug — please
tell us.
The supply and installation of home battery storage in a residential property is
currently zero-rated for VAT under the relief for energy-saving materials, with or
without solar panels. That relief is due to end on 31 March 2027, after which the
expectation is a return to the reduced 5% rate — not to the standard 20%. On a
£5,000 installation that is roughly £250 more, not £1,000 more. Almost everything you will read that
implies otherwise is selling you something.
What the relief covers today
The zero rate applies to the supply and installation of qualifying energy-saving materials in
residential accommodation in the UK. Battery storage sits within that list, and since 1 February 2024
it qualifies whether or not it is installed alongside solar panels — the earlier requirement that a
battery be part of a solar installation was removed. The governing guidance is HMRC’s
VAT Notice 708/6, energy-saving materials and heating
equipment.
| Period | Rate on supply and installation | Note |
|---|---|---|
| Before April 2022 | 5% (reduced rate for ESMs), with conditions | The long-standing position |
| April 2022 – 31 January 2024 | 0%, but batteries generally only as part of a solar installation | The Spring Statement 2022 relief |
| 1 February 2024 – 31 March 2027 | 0%, standalone batteries included | Where we are now |
| From 1 April 2027 | Expected to revert to 5% | Unless extended at a future Budget |
Why the “20% cliff edge” claim is wrong
The zero rate is a temporary enhancement of a pre-existing reduced rate for energy-saving
materials. When the enhancement lapses, the underlying reduced rate is what remains. That is the whole
mechanism, and it is why every serious description of this deadline says 5% and every urgency-driven
one says 20%.
The difference matters because it changes the decision. A 5% swing on a £5,000 system is about
£250; on a £3,000 system, about £150. That is real money and a legitimate reason to prefer this side
of the deadline if you were going to buy anyway. It is not a reason to accept a worse quote, skip
getting three of them, or buy a system sized wrong. A single overpriced quote will cost you far more
than the VAT.
The one genuine uncertainty
Whether the relief is extended. It has been extended and expanded before, and a Budget could do so
again — or could allow it to lapse as legislated. We do not forecast Budgets, and any page telling you
confidently what will happen in 2027 is guessing. What we will do is update this page within days of
any announcement.
What has to happen by 31 March 2027 to get the zero rate
This is where people get caught out, and where you need to be precise with your installer. The
relief attaches to the supply of installation services and the materials installed with
them, and the VAT treatment follows the tax point rules — which turn on when the supply
happens and when payments and invoices fall, not on when you first enquired.
Practical implications:
- A deposit paid before the deadline does not by itself zero-rate the whole job.
Ask your installer in writing how they will treat the balance if work runs past the date. - A battery bought as goods and installed by you is a different supply from an
installed system, and the relief for energy-saving materials is built around installation. Do not
assume DIY purchases are zero-rated. See
VAT on home batteries explained. - Mixed-use and non-residential property can fall outside the relief entirely.
- Get the VAT treatment on the quotation, not agreed verbally. A quote showing
“£4,800 including VAT at 0%” is a document; a conversation is not.
We are not tax advisers and this is general information, not advice on your transaction. Where a
question turns on the timing of your specific contract, the answer comes from HMRC’s guidance and your
installer’s own VAT position.
Should you buy before the deadline?
| Your situation | Does the deadline matter? |
|---|---|
| You were going to buy within the next year anyway, quotes in hand, sizing settled | Yes. Completing before 31 March 2027 saves roughly 5% of the job. Take it |
| You have not yet worked out what size you need | No. Getting the sizing wrong costs multiples of the VAT. Do the work first |
| You are not on a time-of-use tariff and have not checked your spread | No. The tariff decides whether a battery pays at all |
| One installer is pushing hard on the deadline and quoting well above the others | No. The deadline is being used as a closing technique. Get two more quotes |
| You are waiting for prices to fall | Maybe. Falling hardware prices have outpaced 5% in recent years; see buying after the VAT change |
What else is affected by the same relief
The energy-saving materials relief is broader than batteries — it covers solar panels, insulation,
heat pumps and other qualifying measures on the same terms and the same timetable. If you are
considering more than one measure, the deadline applies to all of them together, which strengthens the
case for doing them in one project rather than three.
Note the separate and unrelated change on your electricity bill: VAT on domestic electricity
in Great Britain was cut to zero from 1 October 2026 and is currently legislated to run to 31 March
2027 as well. That is a different measure with a coincidentally similar end date, and it affects what
a saved kilowatt-hour is worth rather than what a battery costs. Both are reflected in our
savings page.
Frequently asked questions
Will VAT on batteries go to 20% in April 2027?
Not on the current legislation. The expectation is a return to the 5% reduced rate for energy-saving
materials.
Does the 0% rate apply to a battery without solar panels?
Yes, since 1 February 2024, when it is supplied and installed in residential accommodation.
Does it apply if I buy the battery myself online?
Do not assume so. The relief is built around installation. See
VAT on home batteries explained.
My installation straddles the date. What happens?
It depends on the tax point of the supply. Get your installer to put their treatment in writing
before you sign.
Could the relief be extended?
It could. It has been before. We will update this page if it is.
Sources.
HMRC, VAT Notice 708/6 — energy-saving materials and heating
equipment ·
GOV.UK, zero rate of VAT on domestic electricity from 1 October
2026 ·
Ofgem, price cap.
General information, not tax advice — see legal notice.