Open letter urges chancellor to commit to 5% VAT on renewables

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An open letter was sent today to the Chancellor of the Exchequer & First Secretary of State the Rt Hon George Osborne MP in regard to the recent EU ruling forbidding a reduced rate of VAT from being applied to certain energy saving materials in the UK from the sustainable energy association.


The letter is backed by 42 organisations who joined SEA in calling for a clear statement from Minsters confirming that nothing will change until the March 2016 budget, and possibly after.

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.

The Sustainable Energy Association is behind the letter calling for a commitment on these changes.

The groups have 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.

This reduced VAT rate could give a massive boost to renewable’s and all those involved in the industry.