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The New Gas Boiler Tax.


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I thought this may be of interest to landlords and non landlords (like Richlist 😅 ) My Son has given me the heads up on this new Boiler Tax which, from trade suppliers, will be coming into force on January 1st 2024. He has been informed that it will apply to him as a registered VAT heating company and boilers will cost an additional £150. Didn't get this new tax info in the Autumn budget did we!

Personally I have given my Son the go ahead to buy a new boiler for me now, tomorrow, to install later in a rental property where I have a 17 year old boiler coming up for replacement. Vaillant of course with their 10 year comprehensive guarantee.  So here is the gist of what is about to happen from January 1st 2024

Article taken from "The Gas Installer Trade Magazine".

The government has confirmed that the new Clean Heat Market Mechanism will launch in 2024. Heating Engineer Andy Gibbs gives his views on what it could mean for installers.  A tax by any other name, is still a tax. The Government announced it will be going ahead with what it calls the Clean Heat Market Mechanism, or the CHMM. Let’s not beat around the bush with long-winded names, it’s a tax on boilers, so let’s refer to it as what it is, Boiler Tax.  Let’s have a quick (if that’s possible) look at what it means for everyone.

The Government set each manufacturer a target  of how many heat pumps they must sell, dependant on how many boilers they currently sell that subsequently get installed. Just selling a load isn’t enough. And for every heat pump they fail to sell, they get fined. Searching around on social media, some were saying that can be up to £3000 each time, so that’s not a small amount. Now I’m crap at maths, so let’s use small numbers to keep it simpler.

Boiler manufacturer A currently makes 100 boilers.
Their target is 4%.
So they have to sell 4 heat pumps.
But sadly, they only sell 2.
That’s a 6 grand fine coming their way.
Now multiply all  those numbers by a thousand.
And the total they must pay in fines is vast. The targets increases over the next two years as well, which is lovely.

So those are huge fines, and the manufacturer won’t simply just pay them, they’ll have to do something to recoup those losses. The easiest way to do this, as far as I can tell, is to pass the cost on where they can, and that means raising boiler prices. So each and every affected manufacturer could put up the cost of a boiler overnight, and that could be as much as £300 per boiler.  That cost will come down the line to you as the installer, and then you’ll have to pass it to your customer. End of discussion on that part of the boiler tax.   Now I wouldn’t mind so much if all those fines went back into the industry, to help with training new entrants, research or maybe funding those who just cant afford a heat pump. But are those fines going to do that or are they simply going to be popped in the Treasury coffers, and spent on HS2, Eat Out to Help Out, or parties in the garden at Downing Street?   You can lead a horse to water, but you cannot make it drink. Ultimately, a manufacturer can make as many heat pumps as possible, but if there is no market to sell them into, they will be hit financially, and that seems unfair to me.


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Follow up

                      All registered heating companies and Worcester Bosch installers have now received official information regarding their new boiler tax imposed by the Government from January 1st. I have put it up for anyone interested in reading it. As my Son was saying the tax applies to any boiler already in stock which is a rip-off isn't it?

My new replacement boiler for one of my rental properties is being delivered tomorrow all bought and paid for saving me an instant £120. My Son will install it at some point in the New Year I guess. He is absolutely maxed out with work at the moment.    Ironic isn't it that everyone wants a new gas boiler installed and not heat pumps.

https://www.worcester-bosch.co.uk/professional/news/clean-heat-market-mechanism?utm_medium=email&utm_campaign=CHMM Installer - Excelerate - WAI&utm_content=CHMM Installer - Excelerate - WAI+CID_2b45fb1d5eb32070fb23142536395fd3&utm_source=Campaign Monitor&utm_term=Find out more

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  • 1 month later...

UK scraps ‘boiler tax’ after makers raise prices to cover any fines

Well, that new Government tax didn't last long did it. 😄

Read all about it:

UK scraps ‘boiler tax’ after makers raise prices to cover any fines (msn.com)

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