The government is publishing a so-called ‘call for evidence’ on options to reform the VAT relief for the installation of energy saving materials.
This call for evidence will discuss whether to include additional technologies and the possible extension of the relief beyond simple residential use - for example, to include buildings used for a relevant charitable purpose.
The installation of certain energy saving materials in residential accommodation already benefits from VAT relief. However, there have been requests for further changes to make the relief more effective and easier to access - this new call for evidence may address that.
However Christy Wilson - associate at real estate law consultancy Katten UK - says the call for evidence is welcome but the government could simply have implemented a faster response.
Wilson says: “Whilst it is a good thing that the government are taking steps to ensure that the installation of energy saving materials is more affordable, the fact that a call for evidence has been announced rather than an active measure or draft legislation does mean that any reform on this topic will not come for a while.
“It could be argued that the government want to ensure that the reforms are appropriate and therefore need industry evidence in order to help them do this, but equally the government is somewhat delaying the process and time is of the essence with climate positive measures.”
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Removing VAT helps to a limited degree.
If the government was serious about Net Zero they would make energy saving home improvements tax deductible for both owner occupiers and landlords.
It would be far easier to administer than any of the green schemes they have previously attempted and no more open to fraudulent activity than anything else.
It may mean the perception is that it helps higher rate tax payers more than benefit claimants but does that matter if the objective is to help towards achieving Net Zero?
I'm not remotely into the whole Net Zero thing from a saving the planet point of view. The UK is a tiny part of the planet. However, I will engage with stuff that is financially beneficial to me.
I've driven a Prius for over 16 years.
I've had solar panels for 12 years.
My husband drives an EV.
We have smart heating controls in multiple houses.
We're gradually replacing old tumble driers with heat pump ones.
All of those things have made sense financially over a period of time. But it has been a risk. It's also been expensive up front. There are much cheaper cars, heating controls and tumble driers using conventional technology.
Countless people told me the Prius battery would be an expensive nightmare and I was mad to buy one. I've actually had 2, both of which we used as taxis. One of my tenants bought the original one off me and it's now 19 years old with well over 300000 miles on the clock.
Countless people told me solar panels wouldn't work in the UK. They've actually been one of the best investments I've ever made.
The new ones I've had installed this year don't make sense financially on paper and one system is predicted to take over 25 years to pay back. However, the panels on the adjoining house have significantly out performed whatever they were supposed to do so I'm confident the new ones will as well. But that's me taking the risk. If they were tax deductible the government would be sharing that risk.
Jo is even more right than usual in her first paragraph, including the last sentence. The target is Net Zero or we'll all suffer, inreasingly.
If Government don't want to make energy saving improvements tax deductible for all homeowners and landlords due to the amount of tax revenue forgone, they could at least do it for landlords' properties rented out.
This could help meet the EPC C target, and fewer emissions.
But importantly help renters, who tend to be less well off than homeowners, so they then spend a little less on their heating (as soon as improvements are complete, into perpetuity -- unlike a one-off benefits rise).
Perhaps wishful thinking, but perhaps even Generation Rant [sic] might back that kind of help to landlords as it would help tenants.
If the Government invested properly in clean nuclear power, especially the small nuclear reactors, akin to submarine power units, individuals wouldn't need to risk solar panels and electric vehicles would be much greener, instead of just moving the pollution to the source of their power.
Long term you're right but it takes decades to get planning permission and funding. The government picked a timeframe that is unlikely to be achievable if they rely on nuclear.
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