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VAT applied to GSHP's & Boreholes

As with any building associated project it is important that the favourable classification of these energy saving technologies by HMRC is fully utilised.

You should not be paying more than 5% VAT on your residential geothermal heat pump installation, including the boreholes and component parts. (HMRC Reference:Notice 708/6 (August 2006))

(If your project is a new build you can apply for full VAT exemption!)

The 5% rate does not apply to non residential contracts, i.e. if Synergy works on a non residential project, we will have to charge 20% VAT.

There are some rules to be observed;

You must use a recognised installer and a recognised product supplied and fitted by that installer. This means that if you attempt to save money by buying a heat pump for example, from a website, you will have to pay 20% VAT. 

The 15% extra cost to you could finance a better quality heat pump.

Make sure before placing your order with any installer that he is going to apply the 5% VAT rate.

Our apologies for the repeated use of the titles water boreholes and geothermal boreholes on these pages; such are the dictates of search engine requirements.