Open letter urges Chancellor to commit to 5% reduced VAT rate on renewables

Published:  03 July, 2015

An open letter was today sent to the Chancellor of the Exchequer, George Osborne, urging the government to affirm their support of current VAT rules that permit a reduced rate of VAT on energy saving products.

The letter comes after the European Court of Justice judgment published on 4 June forbidding the UK’s 5% VAT rate and ruling that it should only apply to transactions related to social housing. The UK will face weekly fines unless it changes the rules.

Forty-two organisations backed the letter, the composition of which was coordinated by the Sustainable Energy Association.

Together the groups called for a clear statement from government ministers confirming that nothing will change until the March 2016 budget - and possibly beyond.

The letter highlights the fact that while the government will require time to consider the potential impact of any changes, an extended period of uncertainty is likely to adversely affect financial markets.

It requests that in the best interest of the renewable energy industry the government confirms no changes will be implemented until next year.

To read the letter in full please visit:

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