Air conditioning that heats is 0% VAT when we fit it in your home, until 31 March 2027
If you've been thinking about air conditioning for a cold bedroom, a home office or the lounge, the VAT rules are worth knowing before you buy. Here's the short version, then what HMRC's guidance says.
The short version
Heat pumps, including air conditioning that heats as well as cools, are 0% VAT until 31 March 2027 when we supply and fit them in your home. Solar panels and batteries fitted in your home are 0% too. Supply-only kit and portable units are 20% VAT.
Why air conditioning can count as a heat pump
HMRC's guidance on energy-saving materials (VAT Notice 708/6) covers air source heat pumps. It explains that a fixed air source heat pump can be reversed, so it can cool in summer as well as heat in winter.
It also says: "HMRC's understanding is that most air conditioning units are air source heat pumps." Every fixed unit we sell heats as well as cools.
There is a condition. HMRC says only air source heat pumps that are permanently fixed, and not portable or moveable, qualify. So portable units are 20%.
HMRC also says that where there is doubt, whether a particular product counts depends on the facts of each case. That's why we check every fitted quote against the manufacturer's data sheet for the exact indoor and outdoor units, and make sure they list a heating output. If a unit only cools, we quote it at 20%. (That last part is our own practice, not an HMRC rule.)
It has to be supplied and fitted
HMRC's notice says the 0% rate applies to the installation, and to the equipment itself when the business that installs it also supplies it. If a business supplies the equipment without installing it, HMRC says that sale is standard rated. The notice's own example: "the sale of energy-saving materials by a retailer is always standard-rated."
In practice:
- We supply and fit it in your home: 0% VAT.
- You buy supply-only kit from us for your own F-Gas engineer to fit: 20% VAT.
Whichever route you choose, a split or multi-split system has to be connected and commissioned by an F-Gas registered engineer, because it holds refrigerant. It's never a DIY job.
Which homes count
HMRC's list of residential accommodation includes:
- houses, blocks of flats and other dwellings
- self-catering holiday accommodation, such as a holiday let
- caravans used as a place of permanent habitation, such as a park home or static caravan on a permanent residential caravan park
HMRC says the standard rate applies to hotels, inns and similar establishments, and to hospitals, prisons and similar institutions. If you're not sure your property counts, ask us before you order.
Extras fitted at the same time
Most installs need a few extras, such as brackets, a condensate pump or a new electrical socket for the unit. HMRC looks at whether everything is really one job. Its indicators of a single supply include a single price, the work being advertised as a package, and everything being installed at the same time. Separately priced or invoiced extra work can be treated differently.
Your quote shows one package price. If anything is ever priced separately, we'll list it separately and tell you it's 20%.
What changes in April 2027
The 0% rate runs until 31 March 2027. HMRC's notice says that from 1 April 2027 the rate reverts to the reduced rate of 5%, not the standard 20%. Rates can change, so check GOV.UK before you rely on a date.
Quick answers
Is a portable air conditioner 0% VAT?
No. Portable and movable units are 20%.
I'm buying supply-only and my own engineer is fitting it. Is that 0%?
No. Supply-only kit is 20% VAT. The 0% rate applies when we supply and fit it in your home.
Does it apply to my holiday let?
Self-catering holiday accommodation is on HMRC's list of residential accommodation, so yes, when we supply and fit it. Hotels and inns are not.
Do solar panels and batteries count?
Yes. Solar panels and batteries fitted in your home are 0% too. HMRC's notice lists electrical storage batteries installed in residential accommodation.
What if my unit only cools?
Cooling-only units are quoted at 20%. We check the data sheet on every fitted quote.
Getting a quote
We fit anywhere in the UK, and we price every air conditioning job from photos, so you don't need to wait in for a visit before you get a price.
Send us photos, a short video walk-round and your room sizes, and we'll come back with a quote. Travel is included, anywhere in the UK. If what we find on the day doesn't match your photos, we'll agree any change with you before we start, and you can cancel instead.
Questions: sales@climatecart.co.uk or WhatsApp 07427 342975.
Browse the range: Air conditioning and air-to-air heat pumps | Heat pumps
Sources: HMRC, "Energy-saving materials and heating equipment (VAT Notice 708/6)", GOV.UK, page shows "Last updated 31 January 2024": https://www.gov.uk/guidance/vat-on-energy-saving-materials-and-heating-equipment-notice-7086 (sections 1, 2.1, 2.3, 2.5, 2.15, 2.19, 2.21; fetched 29 September 2026). Last checked: 29 September 2026.
This is a plain-English summary of HMRC's published guidance, not tax advice for your situation.
ClimateCart is a retailer. Alpha is our preferred manufacturer. Editorial policy & commercial disclosure.
