Spring statement: VAT cut for going green

The Spring Statement announced that VAT on energy saving materials is set to be scrapped.

The announcement of the spring statement brought the news that VAT on energy saving materials is set to be scrapped. Chancellor Rishi Sunak said the move was partly due to rising energy costs as homeowners look to use as little energy as possible in order to save on their bills. The move will see materials such as solar panels, heat pumps and insulation be entirely exempt from VAT for the next 5 years.

The spring statement announced in late March brings good news for homeowners looking to improve the energy efficiency of their properties. The previous, already discounted VAT rate of 5% will now be completely disregarded. The government are attempting to encourage homeowners to make their houses as energy efficient as possible. This aims to help ease the impact of the rising energy bills and partly combat the climate crisis.

The move is designed to help homeowners save some cash if they decide to make environmentally conscious changes to their home. However there is no doubt that it can still be an expensive thing to do. Given the cost-of-living crisis being felt across the UK, you may be reluctant to take on any expensive projects. But there are ways of financing this kind of thing without breaking the bank.

How could I finance the project?

Remortgaging could be the perfect way to finance some environmental home improvements. It’s one of the easiest ways of freeing up some extra cash. This could be put towards taking advantage of the discounts on energy saving materials. On top of this, with the base rate on the rise and all signs pointing to it continuing on its upward trend – remortgaging to a long-term fixed rate mortgage could be the best way to avoid being more seriously affected by the rise in interest.

If you have been considering making improvements or renovations to your home, now could be a good time. As well as offering new opportunities to save money, locking in a long-term fixed mortgage could save you from a much higher mortgage repayment rate in the future.

Things are set to get worse before they get better with further energy price increases expected come Autumn. If you are considering taking advantage of the 0% VAT on energy saving materials or just considering remortgaging to lock in a longer-term fixed rate before rates increase, don’t hesitate to get in contact with us.

If you’d like to discuss the options available to you, contact us today.

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