Rishi Sunak should scrap VAT on climate-friendly products such as solar panels
They said it would create jobs, boost the economy and improve the take-up of green measures that should reduce household bills in the long term. The British Property Federation said it would be “one of the most impactful tax changes to support the improvement of both the energy efficiency and health and safety standards of our homes”.
We are working with eco-entrepreneur Dale Vince to press for an end to a Government tax system that backs fossil fuels and punishes going green.
The system is undermining the Government’s commitment to Net Zero by 2050 which entails slashing greenhouse gas emissions and offsetting any remaining by, for example, planting trees.
Central to this is retrofitting the nation’s 28 million homes to reduce energy use – and them warmer in the process.
Brexit means Mr Sunak is no longer bound by EU VAT rules and can set his own rates to suit the UK.
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And yesterday Adrian Ramsay, the chief executive of MCS Foundation – a leading charity in the renewables and green homes sector, said: “The Daily Express Campaign to make Zero Carbon = Zero VAT is just common sense.
“Now is the time for the Government to reform the VAT rules which currently support coal and gas, and discriminate against clean zero carbon technologies.
“If the Government can zero rate cake then it can do the same for green technologies that will boost the renewables industry and be good for communities and the planet.”
The Daily Express is calling on the Government to show world leadership on the environment in the run-up to the G7 in Cornwall in June and the delayed Cop 26 climate summit in Glasgow in November.
Rishi Sunak is urged to do his bit to help the green future
We want Mr Johnson to opt for Zero for Zero and to make more space for nature.
And yesterday the chief executive of the Builders Merchants Federation, John Newcomb, said he has written to the Government urging a cut in VAT from 20 percent at least 5 percent on climate friendly measures.
Mr Newcomb, who represents a £38billion industry with more than 190,000 employees, said: “BMF members have a key role to play as they make and deliver the majority of materials and products used to provide low carbon solutions for today’s housing.
“The BMF strongly supports the ‘Fabric First’ concept with a coherent, long-term framework that combines better insulation, efficient boilers and low-carbon, micro-generation on the road to net zero carbon emissions.
“Reducing VAT from 20 percent to 5 percent on home improvement works, on the products and installation, is central to this aim and the BMF has written to the Government to outline the economic, environmental and social benefits from improving existing properties with a lower VAT rate.”
A study for the Federation of Master Builders (FMB) forecast a £15billion boost to the economy from a cut in VAT on housing renovation and repair work from 20 per cent to 5 per cent.
FMB chief executive Brian Berry said: “The UK’s 28 million homes are responsible for a fifth of our carbon emissions.
“So if the Government is committed to net zero, it should be making it easier for everyone to make their homes greener.
How Britain can lead the way
“We know that VAT costs put off almost a quarter of people from improving their homes, and builders tell us a VAT cut is the single biggest change the Government could make to help boost their businesses and protect jobs.”
He added: “That’s why we have been campaigning for years for a cut in VAT on home improvement works, to stimulate the economy, create jobs in every community, and remove some of the financial barriers households face to investing in green measures.
“We have some of the leakiest housing stock in Europe, and we urge the Government to take bold steps in the run up to the UN climate change conference in November.
“We need a coordinated National Retrofit Strategy, and incentives like a cut in VAT, to deliver on our world-leading net zero by 2050 target.”
The British Property Federation, which represents a £115billion industry, went further and called for maintenance, repairs and refurbishments to be zero rated for VAT to help Britain get to Net Zero carbon emissions.
In the BPF’s submission to the Treasury, its Assistant Director of Finance Policy, Rachel Kelly, wrote: “The built environment represents approximately 40 per cent of the UK’s carbon footprint – and as such, reducing carbon emissions is a huge priority for our sector. “Retrofitting our existing buildings will improve the energy efficiency of our property stock, and amongst other things, reduce our reliance on oil and gas for heating…
“We would go further to call for a zero-rating of VAT on repairs and maintenance of residential buildings.
“This would be one of the most impactful tax changes to support the improvement of both the energy efficiency and health and safety standards of our homes – and will ensure that the VAT treatment of constructing new build homes, and repairing and maintaining our existing stock is aligned.”
Boris wants to build back with net zero carbon
Among the anomalies in the VAT rules are:
- Electric cars – which are intended to reduce greenhouse gas emissions – pay the same 20 percent VAT as petrol and diesel vehicles.
- Solar panels can carry 20 percent VAT whereas burning coal or gas at home carries just 5 percent VAT.
- Refurbishing or insulating your home incurs 20 percent VAT whereas building a new one is zero-rated.
A Treasury spokesman said all taxes are kept under review.
He said: “We’re committed to building back better and greener from the pandemic.
“The Prime Minister recently set out a Ten Point Plan to achieve this green industrial revolution and the Treasury’s Net Zero Review is looking at how the transition to net zero should be funded.”
The Treasury stressed that Mr Johnson’s 10 Point Plan last year included £12bn of government funding for low carbon technologies such as electric vehicles.
The HM Treasury’s Net Zero Review, due out this year, is studying how to fund the transition to a net-zero economy and how to ensure an equitable balance of contributions between households, businesses and the taxpayer.
— to www.express.co.uk