Wide-reaching support for VAT reduction to improve the Green Deal for homeowners

12 Sep 2011

Policy area: Sustainability, Tax & Finance

The British Property Federation has supported a joint statement calling on the Government to use VAT to incentivise consumer take up of the Green Deal.

Twenty six organisations - including the UK Green Building Council, the WWF and RICS - are backing the statement, which urges the Government to levy VAT at a rate of 5% for all Green Deal approved measures instead of at the higher 20% rate.

The statement has been sent to MPs as they prepare to debate the final stages of the Energy Bill, which is the legislation that will introduce the Green Deal. The statement argues that a financially compelling package is needed for people to take action to improve the energy performance of their homes, and a consistent rate of 5% VAT is a logical step that will make energy efficiency measures more affordable and Green Deal packages more attractive.

All of the organisations involved believe that the Government must do more to stimulate further demand in the energy saving market in order for the Green Deal to be a success.

Ian Fletcher, director of policy at the British Property Federation, said: “The Government must prepare for the Green Deal by stimulating further demand in the energy saving market.

“A package of incentives will help to draw consumer attention to the Green Deal, bring more works within eligibility, and help support a successful launch.

“Therefore, we urge MPs from all parties to ask the Government to levy VAT at a rate of 5% for all Green Deal approved measures.”