UK government has already said it will fight the increase in VAT
A group of European parliamentarians is lobbying Brussels to halt moves by the European Commission to force the UK government to increase the VAT rate on energy efficiency products.
In June, the European Commission told the government to amend UK legislation to bring VAT on energy-saving materials in line with other products. Currently energy-saving materials are taxed at 5% but the commission said this contravened EU law and they should be taxed at the standard 20% rate.
The change would add significant costs to retrofit projects conducted under the government’s Green Deal scheme, with the industry fearing it could undermine the scheme from the outset.
The UK government has already said it will fight the increase in VAT and the European Commission is expected to take the case to the European Court. Now a cross-party group of seven MEPs is preparing to bring forward changes to the law to secure the scheme’s future.
In a letter to the European Commission they said: “Increasing VAT rate in the UK will discourage investment in energy savings. This is illogical and undermines the Energy Efficiency Directive.”