Taxing people who voluntarily choose to upgrade the energy efficiency of their home goes against the government’s 2050 zero carbon target. Particularly as people building new homes that will ultimately add carbon emissions pay no VAT at all.
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Government signed the 2050 Net Zero emissions commitment into law in 2019 and that legislation has since been cited in the decision to prevent a third runway at Heathrow. While VAT on measures such as insulation and heat pumps has been reduced to 5%, it remains at 20% for items like LED lighting and Heat Recovery Ventilation, both of which are essential for a low carbon home. Zero-rating energy saving technologies would stimulate growth in the low carbon economy at a critical time for the UK.