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Solar industry welcomes government policy reversal on VAT rate

Solar industry welcomes government policy reversal on VAT rate


 

The government has said it will not oppose an amendment to the Budget that would see domestic solar PV and other energy-saving materials continuing to benefit from a 5% VAT rate. A ruling from the European Court of Justice had found that the UK’s rules on VAT on these materials were not in line with EU law, and HMRC proposed last year to increase the rate to 20%. Leonie Greene, head of external affairs at the STA said:  “Increasing VAT on solar to 20% while retaining 5% for grid electricity, gas and oil defies all logic, which is why the STA has consistently taken a strong line on this issue. The chancellor can and should stand up to Brussels on this––lower VAT on domestic solar is within the guidelines set out in EU law.”

 

STA