The Clean Heat Market Mechanism, explained for installers

The Clean Heat Market Mechanism, nicknamed the boiler tax, is a target placed on large boiler manufacturers, not a levy on installers or households. Since April 2025 the big manufacturers must earn heat-pump credits equal to a percentage of their boiler sales, or pay £500 per missing credit. There's no direct charge on you or your customer; the price rises you've seen are manufacturers passing on the cost.

How it actually works

Under the mechanism, set out in regulations that took effect on 1 April 2025, manufacturers selling more than 20,000 gas boilers a year have to match a share of those sales with heat-pump installations, earning tradeable credits. The target was 6% of boiler sales in the first year (2025/26) and rises to 8% in 2026/27. Fall short and the manufacturer pays £500 for each missing credit. A separate, higher penalty only applies if they then refuse to pay that.

Who actually pays

This is the part the headlines get wrong. There is no boiler tax on installers, and none on households. The obligation sits entirely with the manufacturers. What happened is that some manufacturers pre-emptively added a sum, widely reported at around £95 to £120, to the price of each boiler and pointed at the scheme. That's a commercial pricing decision, not a government charge, and it's worth being able to explain that to a customer who's seen boiler tax on a quote.

What it means on the tools

Practically, very little changes in your day. You're not liable for anything under the mechanism and you don't have to report anything. The two real effects are that boiler prices nudged up, and that the policy is one more signal of the long-term push toward heat pumps. Neither is an emergency; both are worth understanding so you're the one giving customers the accurate version.