March 15th 2024
Heat pumps: ‘Boiler tax’ to be delayed until 2025
The government have announced that plans to fine manufacturers for installing gas boilers have been pushed back to next year.
Originally due to be implemented from 1st April 2024, ‘boiler tax’ has been created to encourage households away from traditional gas boilers and towards greener heating methods.
However, yesterday – 14th March 2024 – the government announced that they would be delaying the tax to make it easier for householders to qualify for a £7,500 heat pump grant, saying that cavity wall and loft insulation will no longer be mandatory.
Back in October 2023, Prime Minister Rishi Sunak unveiled that the amount a household can qualify for to help with heat pump installation costs would increase to £7,500. Since the uplift, the latest government figures show that new applications have remained nearly 60% higher than before the grant was so high.
Although, the advancement towards clean heating systems meant boiler manufacturers would have had to match, or substitute, 4% of their boiler sales with heat pumps, or face a £3,000 fine for each missed installation.
Nevertheless, the decision to detain the new fining system has cast concerns amongst environmentalists as they have said that it will not help the UK meet its emissions targets.
Doug Parr, policy director of Greenpeace UK, said: ‘This is yet another deeply damaging step backwards from the government on climate that puts our net zero targets in jeopardy and will leave the country paying more for its energy.
‘The whole point of the clean heat mechanism was that manufacturers and supply chains would be pushed into making change happen.’
In addition, Mike Foster, chief executive of the industry group Energy and Utilities Alliance has claimed that the plan to delay boiler tax is clearly a political tactic and not actually centred on trying to make the switch to greener heating systems.
‘The government have set a trap for a future administration, which according to the polls is likely to be Labour, knowing the boiler tax from 2025 is likely to be around £200,’ Foster said. ‘It could be up to Labour Ministers to decide whether to go ahead with the boiler tax, but they have been warned, the public don’t like it; it hits the least well off the hardest and the whole policy needs to be revisited before it harms British companies and British workers.’
On example of how businesses are affected is that, in anticipation of the boiler tax, manufactures have been increasing the costs of gas boilers by up to £120.
Image: Peter Herrmann