Modern Building Services

14 MODERN BUILDING SERVICES MAY 2022 FEATURE HEATING HVAC TECHNOLOGIES AND TECHNIQUES B efore the storm broke over No.11 Downing Street, the Chancellor was widely praised for putting energy and carbon reduction of the built environment at the heart of his Spring Statement. He made a welcome move in bringing forward business rate relief on plant and machinery used in onsite renewable energy generation and storage by a year; and by providing 100% tax relief on eligible low carbon heat networks. These initiatives will be a significant boost to the UK’s plans for decarbonising buildings and could save businesses more than £200m while helping the UK achieve its net zero ambitions, according to BESA. The Chancellor’s decision to abolish VAT on the installation of domestic energy saving measures, including insulation, solar panels, and heat pumps, for five years should also be warmly welcomed. The Association said this would help to drive uptake of carbon reducing technologies and cut energy bills for millions of households. The Chancellor has cut VAT on heat pump installations from 5% to zero and considerably simplified the rules about which types of heat pump qualify. Previously, those used for cooling were not eligible for the reduced tax rate, but the only rule that applies now is that the installation must be capable of heating the home. Complex “The cut in VAT is a welcome incentive for business and domestic users, but equally helpful is the simplification of what had been unnecessarily complex tax rules around heat pumps,” said BESA’s head of technical Graeme Fox. “Previously, air source heat pumps of the split air conditioning type had been specifically ruled out from the reduced VAT scheme,” he explained. “This rule was amended last year, but people were still confused. So, following lengthy talks between the BESA and HMRC, the guidance has been updated to clarify that air source reverse cycle heat pump air conditioners can be treated in the same way as monobloc heat pumps for VAT purposes.” Sunak said Brexit had given him greater freedom to reform UK tax rules and be more innovative in support of key sectors. “Thanks to Brexit, we are no longer constrained by EU law,” the Chancellor said. “So, I can announce that for the next five years, homeowners having materials like solar panels, heat pumps or insulation installed will no longer pay 5% VAT. They will pay zero. Chancellor Rishi Sunak might be getting a real pounding in the press over his family’s tax affairs, but his judgement could not be faulted over some of the changes he announced in his Spring Statement, according to the Building Engineering Services Association (BESA’s) Head of Technical Graeme Fox . A tax move Rishi can defend INFORMED THINKING MBS has teamed up with the Building Engineering Services Association (BESA) to share the knowledge, policy and thinking of the Association. This month, BESA considers the need for action on air quality.