Construction sector ‘must be incentivised to retrofit by removal of VAT rates on green upgrades’

Green Alliance suggests a 20% VAT on repair and renovation work discourages upgrades to existing buildings and incentivises new constructions, contributing to a higher carbon footprint

The UK Government should roll back VAT on building renovation activities to help reboot the construction sector following the coronavirus-driven economic turndown and accelerate the drive towards net zero.

Independent think tank Green Alliance states that 20% VAT on repair and renovation work discourages upgrades to existing buildings and incentivises new constructions, contributing to a higher carbon footprint.

The study refers to the UK’s commitment to building a zero-carbon economy by 2050 and warns that unless more existing buildings are renovated, the target could be missed.

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