NFB Welcomes ‘long overdue’ announcement on VAT For Energy Saving Measures but says Red Diesel changes will ‘hurt’.
In his Spring Statement, the Chancellor of the Exchequer has today announced that the Government will reduce the VAT rate on energy saving measures (ESM) and their installation to zero for homeowners. The National Federation of Builders has welcomed the announcement which will help to incentivise homeowners to invest in improving the energy efficiency and performance on their homes.
Commenting, Richard Beresford, Chief Executive of the NFB said:
“The NFB, along with many others in the industry, has repeatedly, over many years, called on the Treasury to remove the VAT on measures which improve energy efficiency. To us it always seemed like a ‘no-brainer’ to help incentivise the public to ‘green’ their homes and meet our country’s Net Zero ambitions and today we can finally welcome the decision the Chancellor has taken, it is long overdue but at last it is here.”
However, the NFB was disappointed that the Chancellor did not take the opportunity to postpone the changes to the construction sector’s entitlement to use Red Diesel. Beresford added:
“As inflation is set to go above 7% this year, and the Government confirmed its intention to levy a further 1.25% of national insurance contributions on employers, the cost pressures on construction businesses are unprecedented. While the fuel duty cut is welcome for the country at large, the reality is that in construction, the effective rate of duty is set to rise by 47p per litre because of the removal of entitlement to use Red Diesel. The decision not to delay this will hurt businesses at the time when they most needed respite from rampant inflation”.