As of 25 October 2026, a home battery that a business supplies and installs in your home pays 0% VAT until 31 March 2027. From 1 April 2027 the rate becomes 5%, not 20%. That is what HMRC’s VAT Notice 708/6 says, in section 1.1 and again in section 2.1, and it applies across the UK.
So the deadline is real but smaller than the headlines suggest. On a £7,600 installation the change costs £380. That matters, but it is not a reason to rush into a battery that does not pay back. The rest of this guide covers what qualifies, what “installed by 31 March” means under HMRC’s tax point rules, and how to plan an installation so you are not caught out by a job that slips into April.
What the rule says
HMRC’s relief for energy-saving materials (VAT Notice 708/6) zero-rates the installation of listed materials in residential accommodation from 1 May 2023 to 31 March 2027. Batteries were added from 1 February 2024. Section 2.19 covers electrical storage batteries installed in residential accommodation, whether they are:
- retrofitted to an existing solar PV system,
- standalone batteries that charge from the grid (for example on a cheap overnight tariff), or
- connected to both.
That second point surprises people. You do not need solar panels to get 0% VAT on a battery. If you are weighing a grid-only battery, our guide to a home battery without solar covers whether it pays.
“Residential accommodation” is wider than your own house. Section 2.21 lists houses, flats, care homes, hospices, student accommodation, self-catering holiday lets and certain caravans and boats used as a main residence. Hotels, hospitals and prisons are standard-rated.
0%, 5% and 20% side by side
The rate you pay depends on how you buy, as well as when. A sale by a retailer “is always standard-rated” (section 2.3). The relief covers the installer’s supply of materials and the installation service together.
| How you buy | Until 31 Mar 2027 | From 1 Apr 2027 |
|---|---|---|
| Installer supplies and fits the battery | 0% | 5% |
| You buy the battery from a retailer, then pay someone to fit it | 20% on the battery; 0% on the fitting | 20% on the battery; 5% on the fitting |
| You buy and fit it yourself (DIY) | 20% | 20% |
What that means in pounds, using net (ex-VAT) prices. The Energy Saving Trust puts typical battery costs at £1,500 to £10,000, with a 5 kWh system around £4,600.
| Net price | At 0% | At 5% | Extra cost | At 20% (retail) |
|---|---|---|---|---|
| £4,600 | £4,600 | £4,830 | £230 | £5,520 |
| £7,600 | £7,600 | £7,980 | £380 | £9,120 |
| £10,000 | £10,000 | £10,500 | £500 | £12,000 |
The DIY column is the big gap. A battery bought online and fitted yourself costs 20% more than the same unit supplied and fitted by an installer, now and after April 2027.
What “installed by 31 March 2027” means in practice
Notice 708/6 gives the dates but says nothing about tax points, deposits or invoices. For that you need HMRC’s general VAT guide, Notice 700. These are its general rules. Your installer applies them, and their accountant may read a particular contract differently.
The basic tax point is when the work is done. For services, section 14.2.1 says the basic tax point is “the date when the service is performed”, normally when all the work except invoicing is complete. For a battery, that means commissioning day.
Earlier payments and invoices create their own tax points. Under section 14.2.2, if the installer issues a VAT invoice or receives a payment before the work is done, the tax point for that amount is the earlier date. Section 14.2.3 says “most deposits serve primarily as advance payments and will create tax points”. A deposit paid in February is taxed at February’s rate. The rest follows the completion date.
The 14-day rule cuts both ways. If an invoice is issued within 14 days after the work is completed, the invoice date normally becomes the tax point (section 14.2.2). A battery commissioned on 28 March and invoiced on 3 April could therefore fall into the 5% period. For rate rises, section 30.7 lets the installer choose the rate in force when the work was actually done, but that is the supplier’s choice. HMRC’s manual (VATTOS7220) says a customer cannot insist on it.
A contract signed before the change is adjusted unless it says otherwise. Section 30.15 says that, unless the contract provides otherwise, a price agreed before a VAT rate change is adjusted by the amount of the change. If your quote says “£7,600 including VAT at 0%” and the job finishes on 2 April, the installer can normally add £380.
A worked example: a £7,600 job, a £1,900 deposit paid on 15 February 2027, and the battery commissioned on 9 April 2027. Under the general rules the deposit carries 0%. The £5,700 balance carries 5%, which adds £285. Finishing by the end of March saves that £285.
In principle a full VAT invoice or full payment before 1 April fixes the rate on what it covers. Whether an installer will invoice in full for work they have not done is their decision. HMRC had published no guidance specific to the April 2027 change as of 25 October 2026. Paying everything months ahead also puts your money at risk if the installer fails. Ask your installer in writing how they will treat the tax point, and get the answer on the quote.
Does the deadline change whether a battery is worth it?
Usually only slightly. The 5% adds 5% to the price, so it adds roughly 5% to the payback period.
In Fortyeight’s model, a typical London household using 2,500 kWh a year, with no solar or EV, saves about £210 a year with a 10 kWh battery on Agile Octopus. That is compared with the best tariff for the same home without a battery. At £7,600 that is about 36 years to pay back at 0% VAT and about 38 years at 5%. The tariff and how you use electricity decide the result, not the VAT. A household with an EV on Intelligent Octopus Go saves a lot more, which is why we model your own half-hourly data. See are home batteries worth it and the best Octopus tariff for a battery.
Assumptions: Fortyeight’s model, London region, Octopus prices as fetched on 25 October 2026 with 5% VAT on import, 12 months of Agile prices to 24 October 2026, and a synthetic Elexon Profile Class 1 load shape. Your result will differ. Run the calculator with your own meter data before you sign.
If the numbers already work for you, 0% is a reason to act this winter. If they do not, 5% in April will not change much. Paying 0% on a battery that never pays back is still a loss.
The separate VAT cut on electricity bills
Two VAT changes run on the same timetable, and they are easy to mix up.
- Battery VAT (HMRC): 0% on installed batteries and other energy-saving materials until 31 March 2027, then 5%.
- Electricity bill VAT (HMRC, SI 2026/987): qualifying electricity supplies in Great Britain are zero-rated from 1 October 2026 to 31 March 2027; Ofgem’s price cap notice says the same. Gas stays at 5%, and so does Northern Ireland. For direct-debit customers, the 1 October to 31 December 2026 price cap is 26.32p/kWh and 54.83p a day, GB average, with no VAT.
The bill holiday slightly lowers the value of each kWh a battery shifts this winter, because the electricity it replaces is about 5% cheaper. Fortyeight’s model uses the long-run 5% basis for import prices, because a battery pays back over 10 years or more, not over one winter.
Before you sign
- Solar at the same time. Installed solar panels get the same 0% rate until 31 March 2027. If you are adding both, one installation date covers both.
- Grid connection. Under ESQCR regulation 22, systems up to 16 A per phase (about 3.68 kW single-phase) connect under G98, and the installer notifies the DNO within 28 days. Above that, G99 needs DNO acceptance before installation. Battery inverters count towards the total, so solar plus a battery often goes over. An export limiter is one way round. Ask early, because a G99 wait can push a job past 31 March. Our installer questions list covers this.
- Sizing. Do not let the deadline push you into a bigger battery. Our battery sizing guide shows where extra kWh stop paying.
This is a checklist, not tax or legal advice. It reflects HMRC guidance as of 25 October 2026. Your installer decides how to invoice and is responsible for charging the right rate.