2 July 2019

“Think again if you are serious about your zero carbon target”, NFB Major Contractors Group tells Government over planned VAT increase

A large group of major contractors has asked the Government to think again regarding its plans to increase VAT on solar installations from 5% to 20% in the autumn of 2019.

Current government plans to raise the rate of VAT from October 2019 come after the European Court of Justice ruled that energy saving materials should not have been receiving the reduced rate of tax.

The National Federation of Builders Major Contractors Group (NFB MCG), whose membership includes large and influential construction firms from across the UK, has criticised the Government for prioritising taking legislation in relation to this forward in the current political climate – particularly in light of the UK’s decision to leave the European Union. Mark Wakeford, chair of the NFB MCG, commented: 

“The Government’s own commitment to reach net zero carbon emissions by 2050 is the biggest challenge that our construction industry has ever faced. Yet here it is putting up barriers rather than encouraging and supporting the sector’s move to becoming carbon neutral.” 

The NFB  MCG plans to facilitate an open and frank discussion about deliverable solutions the sector can provide and how the Government can help reduce these barriers via an upcoming carbon report to be published later this year.  

 Mark Wakeford added: 

“The sector faces many challenges with skills, resources, knowledge and finance to meet the zero carbon target. Many businesses, groups and experts have identified solutions to these challenges and we would be very interested to share this best practice in our upcoming report. We also however need the Government to work with us with focused and consistent political willpower to support a step change in the UK’s approach to the war on carbon, rather than creating obstacles such as the solar VAT increase.”

Although exact details regarding the specific deal for leaving the EU are yet to be finalised and the UK currently remains bound by EU law, the NFB MCG believes the Government must focus on more pressing legislation, or at the very least commit to reversing any such VAT increase post-Brexit.