What is the Energy Saving Materials VAT relief?
In April 2022, the UK government extended the Energy Saving Materials (ESM) VAT relief to reduce VAT from 20% to 0% on the supply and installation of qualifying energy-efficient products in residential properties. This includes air-to-air heat pumps - the category that covers the Olimpia Splendid Unico HP range - were included in the extension.
The0% VAT runs until March 2027. After this date, it is expected that standard 20% VAT will resume, although the government has indicated it will review the scheme ahead of the deadline.
Which AC systems qualify?
The key requirement is that the system must be an air-to-air heat pump, meaning it provides both heating and cooling functions, not cooling only.
Qualifying products include:
- Olimpia Splendid Unico EVO and PRO HP models - included
- Standard air-to-air split systems with heat pump function - included
- Cooling-only air conditioners - do not qualify
- Portable AC units - do not qualify
What are the conditions?
- Must be a residential property
- Supply and installation must be from the same supplier/installer (not supply-only)
- Must be installed by a qualified person
- Installation must be completed before the March 2027
How much could you save?
A typical installation cost starts at £850 with the 0% VAT you're saving a minimum of £170.00.
The Air Shop offer a Supply & Install service for Monobloc AC units (AC without the outdoor unit) across the Greater London Area.
If you are interested in a quotation, please provide information and pictures of the proposed internal space and external facade.
Looking ahead - the Boiler Upgrade Scheme 2027
The November 2025 Autumn Statement confirmed that air-to-air heat pumps will be added to the Boiler Upgrade Scheme from 2027, with a grant of £2,500 per qualifying installation. This is in addition to, not a replacement for, the 0% VAT scheme - more details to follow soon!
Interested in installing an Olimpia Splendid Unico AC unit? Shop our full range
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