Big boiler manufacturers cannot guarantee ‘boiler tax’ refund for ‘ripped off’ customers
Three of the “big four” boiler manufacturers for the UK cannot guarantee customers will be refunded the so-called “boiler tax” that companies added to new boilers earlier this year.
In January boiler-makers hiked costs by up to an extra £120 per boiler to cover anticipated penalties for a green scheme – which has now been delayed.
Ministers had told them to ensure 4% of their sales were heat pumps rather than gas boilers, or they would face a £3,000 fine per missed installation.
As heat pumps run on electricity rather than gas, the move was designed to boost energy security, and lower air pollution and greenhouse gas emissions.
The energy security secretary Claire Coutinho accused the manufacturers of “price gouging”, and told LBC heat pump sales were already so high that they anticipated few penalties.
Boiler makers said the unachievable targets would create multi-million-pound penalties they could not afford, so upped the price of gas boilers to cover the anticipated charges.
But in March, the government delayed the heat pump target – also known as the clean heat market mechanism (CHMM) and dubbed the “boiler tax” – to April 2025, following resistance from the boiler industry.
Three of the “big four” boiler manufacturers, Bosch, Vaillant and BAXI, this week told Sky News they were refunding the “boiler tax” cash to the distributors and retailers to whom they had sold boilers.
But they said it was those companies’ responsibility to return the money to households, because manufacturers tend not to have a direct relationship with consumers themselves.
No one from Ideal Heating was available to comment or confirm its plans.
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‘Out of pocket’ households
It comes as energy thinktank ECIU estimates the four firms together would have collected £40m via the so-called boiler tax, based on the average amount levied and an average number of boilers sold per month in the UK.
Jess Ralston, ECIU’s head of energy, said: “The manufacturers introduced the boiler tax, not the retailers, so it feels like they are passing the blame to a middle party.
“They had been suggesting the fines should be removed, so they must have thought it was a possibility they’d have to refund the boiler tax – it doesn’t seem they put in place any mechanisms for that eventuality, leaving someone else on the hook.”
Gillian Cooper, director of energy at Citizens Advice, said: “Now that boiler retailers have rightly been promised refunds, it’s essential they pass those refunds on to consumers.
“Anyone who purchased a boiler between 1 January and the end of March this year may have been forced to pay more than they should have, leaving them out of pocket.
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“Not only have people been ripped off, but the government’s decision to delay the Clean Heat Market Mechanism in response to manufacturers’ pressure will leave consumers exposed to volatile gas prices for longer.”
After the government confirmed the CHMM delay, retailer Wolseley, which sells boilers made by Vaillant, confirmed it was taking responsibility for issuing refunds on boiler sales.
Clean home heating company Warmur urged boiler manufacturers to “proactively contact customers they know to have had a boiler fitted since 1st January and help them arrange a refund”.
What did boiler manufacturers say?
BAXI said its consumers will receive a refund because it is returning “any funds already collected to our merchant distributors, who then supply products to a 35,000-strong installer community, who then sell onto consumers”.
“We are part way through completing that process, although we stopped adding the surcharge from Monday 18 March.
“In the small number of cases where we sell direct to consumers through warranty relationships, we will be refunding the surcharge to them directly.”
A Vaillant spokesperson said: “Vaillant has communicated with its direct merchant customers that the boiler levy has been removed as of the 19th March 2024 and all levies charged since 1st January 2024 will be refunded in full.”
“Vaillant can only ensure our direct customers are refunded, and it is not visible to us to what extent installers and merchants have passed the levy on.”
A Bosch spokesperson said: “We have refunded in full to our merchant customers 100% of the levy charged on boilers we sold to them in the period 1 January 2024 – 15 March 2024.
They added: “Our trading relationship is with the merchant and we have returned the levy to them. We do not sell boilers to end consumers.”
Four people have been arrested by police investigating cyber attacks targeting M&S, Co-op and Harrods.
A 20-year-old woman and two males, both aged 19, and a male aged 17, were detained in London and the West Midlands this morning as part of a National Crime Agency (NCA) operation.
They were arrested at their homes on suspicion of Computer Misuse Act offences, blackmail, money laundering and participating in the activities of an organised crime group.
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Electronic devices were seized from the suspects and are currently being analysed by forensic experts.
M&S halted online orders, and shelves were empty in shops after the cyber attack on the retailer earlier this year.
The initial hack into the retailer’s systems took place in April through “sophisticated impersonation” involving a third party.
Disruption is expected to continue at the retailer until the end of this month.
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The Co-op and Harrods were also subsequently targeted by hackers.
Paul Foster, head of the NCA’s National cybercrime unit described the arrests as a “significant step” in their investigation, which remains “one of the Agency’s highest priorities”.
He added: “…our work continues, alongside partners in the UK and overseas, to ensure those responsible are identified and brought to justice.”
The National Crime Agency is keen to “signal” to “future victims” the “importance of seeking support and engaging with law enforcement”, stating that “the NCA and policing are here to help”.
The NCA has also thanked M&S, Co-op and Harrods for their support in their investigations.
The arrests, which took place early on Thursday morning, were supported by officers from the West Midlands Regional Organised Crime Unit and the East Midlands Special Operations Unit.
Earlier this week, the chairman of M&S told MPs that the hack had been “traumatic” and like an “out-of-body experience”.
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Archie Norman, however, refused to be drawn on whether the retailer had paid any ransom.
“We are not discussing any of the details of our interaction with the threat actor, including this subject, but that subject is fully shared with the NCA,” he said.
It is estimated that the cyber attack will cost M&S up to £300m this year.
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Days after M&S was attacked, the Co-op was targeted and forced to shut down some internal systems.
Harrods was then hacked, and also had to shut some systems despite its website and shops continuing to operate.
Of those arrested, a 17-year-old British male and a 19-year-old Latvian male were from the West Midlands.
A 19-year-old man was from London and a 20-year-old woman from Staffordshire.
Royal Mail is to be allowed to scrap Saturday second-class stamp deliveries, under a series of reforms proposed by the communications regulator.
From 28 July, Royal Mail will also be allowed to deliver second-class letters on alternate weekdays, Ofcom said.
The post will still be delivered within three working days of collection from Monday to Friday.
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The proposals had already been raised by Ofcom after a consultation was announced in 2024, and the scale back was proposed early this year.
Royal Mail had repeatedly failed to meet the so-called universal service obligation to deliver post within set periods of time.
Those delivery targets are now being revised downwards.
Rather than having to have 93% of first-class mail delivered the next day, 90% will be legally allowed.
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The target for second-class mail deliveries will be lowered from 98.5% to arrive within three working days to 95%.
A review of stamp prices has also been announced by Ofcom amid concerns over affordability, with a consultation set to be launched next year.
It’s good news for Royal Mail and its new owner, the Czech billionaire Daniel Kretinsky. Ofcom estimates the changes will bring savings of between £250m and £425m.
A welcome change?
Unsurprisingly, the company welcomed the announcement.
“It is good news for customers across the UK as it supports the delivery of a reliable, efficient and financially sustainable universal service,” said Martin Seidenberg, the group chief executive of Royal Mail’s parent company, International Distribution Services.
“It follows extensive consultation with thousands of people and businesses to ensure that the postal service better reflects their needs and the realities of how customers send and receive mail today.”
Citizens Advice, however, doubted whether services would improve as a result of the changes.
“Today, Ofcom missed a major opportunity to bring about meaningful change,” said Tom MacInnes, the director of policy at Citizens Advice.
“Pushing ahead with plans to slash services and relax delivery targets in the name of savings won’t automatically make letter deliveries more reliable or improve standards.”
Acknowledging long delays “where letters have taken weeks to arrive”, Ofcom said it set Royal Mail new enforceable targets so 99% of mail has to be delivered no more than two days late.
Changing habits
Less than a third of letters are sent now than 20 years ago, and it is forecast to fall to about a fifth of the letters previously sent.
According to Ofcom research, people want reliability and affordability more than speedy delivery.
Royal Mail has been loss-making in recent years as revenues fell.
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In response to Ofcom’s changes, a government spokesperson said: “The public expects a well-run postal service, with letters arriving on time across the country without it costing the earth. With the way people use postal services having changed, it’s right the regulator has looked at this.
“We now need Royal Mail to work with unions and posties to deliver a service that people expect, and this includes maintaining the principle of one price to send a letter anywhere in the UK”.
Ofcom said it has told Royal Mail to hold regular meetings with consumer bodies and industry groups to hear their experiences implementing the changes.
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