The European Commission has confirmed it will take the United Kingdom to court in an attempt to force the Treasury to impose the full rate of VAT on energy-saving goods, warning tax breaks will not help deliver the aims of the government’s flagship Green Deal energy efficiency scheme.
The commission issued a statement on Thursday confirming it will refer the UK to the EU Court of Justice over the practice of imposing reduced VAT rates on green goods.
The UK Treasury charges a lower five per cent rate of VAT on some energy-saving materials instead of the standard 20 per cent, in a move designed to reduce the upfront costs of installing energy-efficient products.
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