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Treasury must appeal 5% VAT ruling, industry says

A letter has been sent to Chancellor George Osborne urging the government to appeal against the European Court of Justice ruling that the UK 5% VAT rate on energy-saving products and materials is illegal (see H&V News, 17 June).

Signed by major industry bodies – including the B&ES, HHIC and STA, along with major suppliers such as Baxi, Mitsubishi Electric and Vaillant – the letter was coordinated by the Sustainable Energy Association.

Describing the ruling as “clearly an unhelpful outcome” for the industries affected, it encourages the government to “find all legal means possible” to reduce the effects and preserve “as many of the reduced rates as you can”, while requesting particular emphasis on “reducing fuel bills, improving energy security, relieving fuel poverty and reducing CO2 emissions”.

Although recognising that gathering the necessary evidence will take some time, the letter also emphasised the difficulties that ongoing uncertainty created for the market and investor confidence.

The letter included a clear request for confirmation that nothing will change before the March 2016 budget “at the earliest”.