It is well-known that there are problems with the standard model of cosmology that hint at possible physics beyond the $\Lambda$CDM paradigm. In particular, the 4$\sigma$ tension in the values of $H_0$ coming from CMB and supernovae measurements is motivation enough to consider alternative cosmological models.
In this talk, I will introduce one such model, the interacting vacuum scenario. Beginning with the covariant theory of the interaction, I will show the linear theory of perturbations in the scenario before specialising to the spatially flat FLRW background. I will describe how the interaction parameter can be constrained using MCMC methods and show the results of our investigation for both a constant and a dynamical interaction, focusing on the effects of the interaction on the cosmological tensions.