Heat Network Relief

At the Spring Statement 2022, the Chancellor announced that a new Heat Network relief will apply from Friday 1 April 2022 for hereditaments being used wholly or mainly as a heat network which have their own rating assessment.

What is a Heat Network?

Heat networks take heat or cooling from a central source(s) and deliver it to a variety of different customers such as public buildings, shops, offices, hospitals, universities and homes.

By supplying multiple buildings, they avoid the need for individual boilers or electric heaters in every building. Heat networks have the potential to reduce bills, support local regeneration and be a cost-effective way of reducing carbon emissions from heating.

Eligibility

To be eligible for Heat Network Relief the hereditament must:

• Have their own business rates assessment
• Be wholly or mainly used for the purpose of a heat network, and
• The heat, over the next 12 months, is expected to be generated from a low carbon source (irrespective of whether that source is located on the hereditament or on a different hereditament)

Full details for this relief and the eligibility rules can be found on the government website.

Exclusions

The following hereditaments are not eligible for Heat Network relief:

• Those that are wholly or mainly providing heat for a different purpose, for example an industrial process
• Those that do not have their own business rates assessment such as small and medium scale heat networks, for example common heating systems in multi-occupied buildings or estates, which do not give rise to a separate business rates bill. In these cases, the heat network forms part of the services of the properties which have a wider purpose (eg offices)

How much relief will be available?

Relief is available at 100% of the chargeable amount for the hereditament for any day on which the eligibility criteria are met.

As this is currently a discretionary relief it will be applied after any applicable mandatory reliefs but before any other discretionary reliefs.

Subsidy compliance

The Heat Network relief is subject to the UK’s domestic and international subsidy control obligations. Businesses eligible for relief will need to fulfil any requirements in place to ensure compliance with those obligations in advance of, during, and after claiming relief.

More information is available on our subsidy allowance page.