Treasury proposes rise from 5% to 20%, while the tax on coal will stay at lower rate
Homes hoping to shrink their carbon footprints by installing a solar-battery system face a steep VAT increase from October under new laws proposed by HMRC.
The Treasury put forward legislation on Monday to raise VAT for home solar-battery systems from 5% to 20%, on the same day that MPs are debating the government’s new net zero carbon target for 2050.
Meanwhile, home coal supplies will continue to receive the lower VAT rate.
The Renewable Energy Association (REA) said the rise “contradicts the government’s commitment to tackling climate change” only weeks after parliament declared a climate emergency.
It also warned that the move would push back the take-up of solar-battery systems by years even as the UK works towards becoming a net zero carbon economy by 2050.
Nina Skorupska, the REA’s chief executive, said the increase would “create a barrier to British homes and businesses who are seeking to take action on climate change and reduce their bills by installing solar with battery storage”.
She said the government “should be doing all it can to install these technologies rather than enacting barriers”.
Read more: The Guardian