22 Jun '12, 10am

Treasury could fight EU calls to end tax breaks for energy-saving

The Treasury has hinted it could fight back against an EU ruling demanding the UK imposes the full rate of VAT on exempted green products, including insulation on walls, floors and lofts, in a move that could prove a major blow to the government's Green Deal energy efficiency plans. The European Commission yesterday ordered the UK government to scrap a law allowing reduced VAT rate for "energy-saving materials", arguing it failed to comply with the EU's VAT Directive . FURTHER READING Conservative ministers urge Cameron to back green growth LEDs light path to carbon savings for Toyota The UK Treasury charges a lower five per cent rate of VAT on some energy-saving materials instead of the standard 20 per cent, in a move designed to reduce the upfront costs of installing energy-efficient products. Exempted products include insulation, controls for central heating and hot wat...

Full article: http://www.businessgreen.com/bg/news/2186410/treasury-fig...

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