3.—(1) In Schedule 8 to the Value Added Tax Act 1994 (zero-rating), in Part 2, Group 23 (installation of energy-saving materials before 31st March 2027)(1) is amended as follows.
(2) In items 1 and 2, for “residential accommodation.” substitute
“—
(a)residential accommodation, or
(b)a building intended for use solely for a relevant charitable purpose.”.
(3) In paragraph 1 of the notes (meaning of “energy-saving materials”)—
(a)the existing text becomes sub-paragraph (1);
(b)after sub-paragraph (1)(i) insert—
“(ia)water source heat pumps;”;
(c)after sub-paragraph (1)(k) insert—
“(l)electrical storage batteries within sub-paragraph (2);
(m)smart diverters.”;
(d)after sub-paragraph (1) insert—
“(2) An electrical storage battery is within this sub-paragraph if it is intended for use solely for storing energy converted from electricity that was—
(a)supplied to the residential accommodation or building in question, or
(b)generated by a microgeneration system.
(3) In sub-paragraph (2), “supplied” is to be construed in accordance with Part 1 of the Electricity Act 1989 (see section 64(1) of that Act).
(4) In sub-paragraph (1)(m), “smart diverter” means a device capable of automatically diverting electricity generated by a microgeneration system to one or more appliances, in particular circumstances.
(5) In sub-paragraphs (2) and (4), “microgeneration system” means equipment—
(a)that generates electricity, and
(b)that is itself an energy-saving material for the purposes of this Group.”.
(4) After paragraph 3 of the notes, insert—
4. For the purposes of item 1, “installing energy-saving materials” includes carrying out groundworks, or dredging a body of water, in order to install pipework or other equipment necessary for the operation of a ground source heat pump or a water source heat pump.
5. For the purposes of this Group a building is used “for a relevant charitable purpose” if it is used by a charity—
(a)otherwise than in the course or furtherance of a business, or
(b)as a village hall or similarly in providing social or recreational facilities for a local community.”.
Group 23 of Part 2 of Schedule 8 was inserted by S.I. 2022/361 and amended by S.I. 2023/376.