28/08/2026
Domestic Air Conditioning VAT Is Changing From April 2027
Thinking about installing air conditioning at home?
Under the current HMRC rules, qualifying permanently installed domestic air conditioning systems are 0% VAT until 31 March 2027.
From 1 April 2027, qualifying installations are scheduled to move to the reduced 5% VAT rate.
Importantly, this is not a move to 20% VAT for qualifying installations.
Why does air conditioning qualify?
Most modern fixed air conditioning systems provide both heating and cooling, meaning they operate as air to air heat pumps.
A few important points:
• Qualifying installations are currently 0% VAT
• The scheduled rate from April 2027 is 5%
• The system must meet HMRC qualifying requirements
• Permanently installed systems are treated differently from portable air conditioners
• Equipment purchased without installation can have different VAT treatment
For homeowners already considering air conditioning, the change is worth factoring into your plans, particularly for larger multi room installations.
We have published a full guide explaining the April 2027 VAT change and which domestic air conditioning systems qualify. You can find this in the comments.
ClimateWorks | Residential Air Conditioning Specialists
climateworks.co.uk
