Green Party launches RetroFirst-inspired petition to cut VAT

The Green Party is calling for VAT on refurbishment to be slashed to 0 per cent in a new Parliamentary petition.

A petition on the Downing Street website calls on the government to effectively remove VAT on refurbishment projects – which would have been impossible while the UK was within the EU – and raise VAT on non-Passivhaus new-build construction to 20 per cent.

Molly Scott Cato, the party's finance spokesperson, told Architects' Journal: "We need to use tax strategically to make sure that the cheapest and easiest thing to do is also the greenest. The current VAT regime sets up the incentive in the opposite direction.

"For decades the Treasury have failed to take this action, often blaming the EU for tying their hands. Now that that excuse is no longer available I hope we'll see urgent action to tilt the playing field in favour of retrofit."

The Green Party's petition says: "To 0 per cent rate VAT on refurbishment projects' total cost if they substantially reduce CO2e emission of the building; impose a 20 per cent VAT for new build schemes, reduced to 5 per cent if the build meets minimum passive house standard; to 0 per cent rate VAT for all items on a regularly updated list of energy-saving products. 

"Since Brexit, the UK has total freedom to use a differential VAT regime to address the climate emergency. UK construction industry produces 40 per cent of our total emissions; initial embodied carbon can account for 75 per cent of lifetime emissions.

"Retrofitting is carbon-efficient but the current VAT regime privileges new-build over refurbishment.

"The government could also incentivise retrofit by removing the liability for VAT from all energy-efficiency products and simplify the processing for claiming back."

This article originally appeared on Architects' Journal, written by Will Hurst