The government now has less than a week to respond to claims that it acted unlawfully in removing tax relief from community energy schemes.
The Treasury’s legal department has been in correspondence with Community Energy England’s (CEE) lawyers Bates Wells Braithwaite (BWB), but conceded that it had “yet to respond to [your] letter”.
The letter was submitted under the Department of Justice’s Pre-Action Protocol for Judicial Review, under which the Treasury should respond no later than noon on Monday, 7 December saying whether it accepts all or part of the claims.
“We are not entirely surprised it is taking them so long to come up with answers”, said CEE chairman Philip Wolfe. “It is hard to dispute that the Treasury has not acted in accordance with specific statements made in the budget earlier this year. Our members have planned their projects in the legitimate expectations that those undertakings would be honoured.”
Some community energy projects did manage to accelerate their plans, raising several million pounds last week before the Enterprise Investment Scheme (EIS) was closed to them yesterday on less than five weeks’ notice.
The pre-action letter was submitted on behalf of CEE, working in collaboration with Community Energy Scotland and Community Energy Wales.
It details why they consider the Treasury has acted unlawfully in withdrawing tax relief under the EIS without the agreed period of notice, and in not making available Social Investment Tax Relief as previously promised.
The Treasury had confirmed in this year’s budget that tax relief for community energy enterprises would be available under EIS until the relief was migrated to SITR, with at least six-months’ notice beforehand.
TAn unexpected announcement on 26 October 2015 changed its previous policy and declared that all tax relief would end with barely one month’s notice on 30 November.
BWB public and regulatory law partner Selman Ansari said that the government’s change in approach had not been supported by any ministerial announcement, evidence or consultation.