Friday 3 May 2019

Renewable Energy Association contests proposed tax hike on low carbon tech

The Renewable Energy Association (REA) has contested a proposed tax hike on low carbon tech.

The clean energy organisation has called on HMRC not to increase VAT rates for technologies such as domestic solar, biomass boilers and battery storage by between 5% to 20%, as suggested in a consultation closing today.

It notes most domestic clean energy installations of this kind previously benefitted from a reduced VAT rate of 5%, a level it suggests many considered finalised since 2015/16.

The REA claims the move will effectively add 15% to the cost of equipment for many new projects, which it believes will discourage people from reducing their carbon footprint, put the UK at a disadvantage for attracting investment and contradict the government’s commitment to tackling climate change.

It notes the proposals follow the government cutting support for other 'key schemes' such as the Feed-in Tariff.

Frank Gordon, Head of Policy at the REA, said: "Despite recent mass climate-related protests and the UK Parliament declaring a ‘climate emergency’, the government is again erecting a barrier to cutting emissions and increasing the costs for households who want to help.

"They are also failing to recognise the cumulative impact of withdrawing as many as 18 policy mechanisms that supported renewable energy deployment since 2015, which could leave the UK trailing behind on decarbonisation and clean growth."

ELN has contacted HMRC for a response.