Isle of Man widens the temporary VAT zero rate for installing energy-saving materials from 1 February 2024
This page records one dated change. For the rules in Isle of Man as they stand today, see the Isle of Man guide →
- Jurisdiction
- Isle of Man
- Tax
- VAT
- Change type
- Rate change
- Status
- In force
- Impact
- FYI
- Announced
- 20 February 2024
- Effective
- 1 February 2024
- Instrument
- IM-STATUTORY-ORDER-SD-2024-0053
- Authority
- Isle of Man Treasury
- Verified
- Fetched from official source · high confidence
Installers of energy-saving materials in the Isle of Man, and charities whose buildings are used solely for a relevant charitable purpose, such as village halls.
No action — temporary zero rate continues through 31 March 2027.
The Value Added Tax (Installation of Energy-Saving Materials) Order 2024 (SD 2024/0053, made by the Isle of Man Treasury on 20 February 2024, in operation from 1 February 2024) widened the temporary zero rate of VAT for installing energy-saving materials (the Order describes it as running from 1 April 2022 to 31 March 2026; its explanatory note says 31 March 2027). The zero rate now also covers buildings used solely for a relevant charitable purpose, such as village halls; water source heat pumps, electrical storage batteries and smart diverters were added to the list of energy-saving materials; and groundworks or dredging needed to install ground or water source heat pumps count as installation.
What changed in detail
The Value Added Tax (Installation of Energy-Saving Materials) Order 2024 (SD 2024/0053) was made by the Treasury Minister on 20 February 2024 and laid before Tynwald on 19 March 2024. It came into operation retrospectively on 1 February 2024. It amends Schedule 9, Group 23 of the Value Added Tax Act 1996, which holds the temporary zero rate for installing energy-saving materials. The Order is not consistent on how long that zero rate lasts. Article 4(1) describes Group 23 as covering installation from 1 April 2022 to 31 March 2026, while the explanatory note, which is not part of the Order, gives the period as 1 April 2022 to 31 March 2027.
Article 4 makes three changes:
- Charity buildings. The zero rate now covers installation in a building used solely for a relevant charitable purpose, as well as in residential accommodation. A relevant charitable purpose means use by a charity other than in the course of a business, or as a village hall or similar social or recreational facility for a local community.
- More materials. Water source heat pumps, electrical storage batteries and smart diverters are added to the list of energy-saving materials. A battery qualifies only if it is used solely to store electricity supplied to the building or generated by a microgeneration system.
- Groundworks. Groundworks, or dredging a body of water, to install pipework or other equipment needed for a ground or water source heat pump now count as installation.
What it means
The end date of the temporary zero rate is not settled by this Order alone: its operative text says 31 March 2026 and its explanatory note says 31 March 2027. Installers relying on the relief now should check the current text of Schedule 9, Group 23 of the Value Added Tax Act 1996 before treating it as still available. The Order mirrors the UK, which made the same changes from 1 February 2024, in line with the Customs and Excise Agreement. Battery retrofits are the main trap. A battery added to an existing solar system qualifies only if it stores energy from the grid supply or a microgeneration system, as Article 4 defines.
Proof
This Order amends the Value Added Tax Act 1996 to widen the scope of the temporary zero-rate of value added tax (which applies from 1st April 2022 to 31st March 2027 in the Island) for the supply of installation of energy-saving materials.
Source snapshot of the official page. Open full size ↗Archived from the official distribution · Statutory Document No. 2024/0053, Value Added Tax (Installation of Energy-Saving Materials) Order 2024, made 20 February 2024 · tynwald.org.im