‘Boiler tax’ refund - next steps for traders

TT Boiler Tax 780 385 (1)


In January this year, the big four boiler manufacturing companies increased prices by between £95 and £120 (£114 and £144 including VAT), in response to the government’s proposed ‘clean heat market mechanism’.

The planned green initiative meant that boiler companies would face hefty fines if heat pumps did not make up at least 4% of sales.

Specifically, the government has said that the manufacturers would pay £3,000 per missed heat pump installation.

The big four boiler companies campaigned against the legislation, but also hiked up the prices of gas boilers to absorb the potential cost of penalties.

In March, the government announced that it would be delaying the heat pump target rules, with a new proposed implementation date of April 2025.

However, customers had already been paying increased prices for three months and could be owed a repayment. While it's not technically a 'refund' in the truest sense of the word - as it's not a repayment for something sold with a fault or with false information - it's being widely referred to as a refund by those in the industry. Read our consumer article on Which.co.uk.

What does it mean for traders?

The boiler brands that increased their prices include Baxi, Ideal, Vaillant/Glow Worm and  Worcester Bosch. 

The good news now is that some manufacturers have announced they will be refunding the added cost of the boilers. 

Baxi has said: ‘As we have consistently stated, we… will work with our distributors to return any surcharge that we’ve already collected.’

Worcester Bosch applied a £120 levy to each boiler sold to a merchant customer between 1 January 2024 and 15 March 2024, however has said: ‘We have refunded in full to our merchant customers 100% of the levy charged on the boilers sold to them between 1 January and 15 March 2024.’

However, as the manufacturers typically do not have relationships with the end-customers, they are refunding to distributors. 

These distributors should then be refunding installers, who should be refunding customers if they passed the additional charges on.

Some businesses have got ahead on the curve on this, putting out clear statements on their plans for refunds.

Wolseley said that it ‘will refund its customers for all CHMM levy charges applied on Baxi, Worcester Bosch and Vaillant (including Glowworm) boilers since 1 January 2024.’

The company has also amended its prices for Ideal boilers and will issue its customers a refund for price increases on boilers purchased between 1 January 2024 and 15 March 2024.

Similarly, City Plumbing has made an announcement that clearly lays out the situation and next steps to customers.

It said: ‘Following the recent announcement about changes to the clean heat market mechanism, we’re offering our customers a quick and simple refund process for the added cost that was applied to any boilers by manufacturers, for products purchased between 1 January 2024 and 21 March 2024.

‘If you have a credit account, this refund will be processed automatically and appear on your account balance at the end of your statement month. If you are a cash account customer (online or in a branch) and you purchased by credit or debit card, this will be refunded back onto your card as soon as we can. One credit note per invoice will be received.’

It also spells out the refund steps for online non-account customers, and those who paid by cash or cheque, including a form that needs to be filled in.

The update even includes a helpful table explaining how much the refund is for each type of boiler, and confirms that any other types of boiler sold did not have a price increase added, so no refund will apply.

However, after speaking with some Which? Trusted Traders, we found that not every boiler installer passed on the additional costs to customers in the first place. 

How to navigate communications

Small businesses should prioritise communicating clearly and quickly, with easy to find information and timely responses to questions. If you’ve had a refund from your suppliers, let customers know how and when you will be passing that money onto them, and how much they will receive.

If you didn’t pass on costs to your clients, or if you don’t use the impacted boilers, make sure that information is clearly visible on your website and customers understand why they won’t be eligible for a refund.

Where possible, money should be returned automatically, but if that is not feasible then the process for claiming it should be clear and simple. Consider sending blanket emails to customers explaining what has happened, and what your next steps will be. 

Even though price rises didn’t originate with installers, it is small traders whose reputations could be on the line if communication is not handled swiftly and transparently.