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Rishi Sunak should use new Brexit freedoms to cut taxes and go green, say experts

BREXIT should be an opportunity to cut tax and go green, experts say.

They called for Chancellor Rishi Sunak to use his new freedoms to scrap VAT on eco-products such as solar panels, electric cars and double glazing.

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Experts have called for Chancellor Rishi Sunak to use his new Brexit freedoms to scrap VAT on eco-products[/caption]

Hayden Wood, boss of renewable energy firm Bulb, said making the move in next month’s Budget would show Britain meant business ahead of hosting the COP26 UN climate summit in November.

Tory MP Robert Goodwill, who sits on the Environmental Audit Committee, backed the call to help poorer Brits make their homes more eco-friendly, for instance by improving insulation.

He told The Sun’s Green Team campaign: “We already penalise people with taxes on cigarettes — why not try to incentivise people to do the right things?

“The Chancellor should definitely be trying to do that for the people who find it most difficult to improve their homes, and they are the people who would benefit from it.”

While in the EU, Britain was unable to set VAT on many products.

But since Brexit, Mr Sunak has already ditched the tampon tax on sanitary products.

Last night, Treasury sources refused to comment on tax policies ahead of the Budget, but stressed that the Chancellor was always open to ideas from colleagues.

And a Treasury spokesman said: “We’re committed to building back better and greener from the pandemic.”

Bulb's full letter to Rishi Sunak

Dear Chancellor,

I’m writing to ask you to take urgent action in the upcoming 2021 Budget and make green products more affordable by reducing the rate of VAT charged on them to zero.

Ahead of COP26 this year, Bulb’s calling for the UK to show bold commitment to the green recovery by extending VAT exemption to electric vehicles (EVs) and associated charging technology, heat pumps, batteries, solar panels, secondary or double glazing, low carbon boilers and white goods, as well as insulation and other energy efficiency fittings.

Many of these products are currently levied at the full 20% VAT rate.

Making low carbon products and green technology cheaper will provide a welcome cash boost for hard-pressed families.

For example, cutting VAT would reduce the cost to consumers of a Honda E, a mass-market pure EV, by over £4,500, making it more affordable for drivers to switch away from petrol and diesel vehicles ahead of the 2030 ban that the government has announced.

In December of last year, the government committed to reducing greenhouse gas emissions by at least 68% by 2030, compared to 1990 levels.

To achieve this, and for the UK to meet net zero by 2050, we need to make 2,000 homes carbon neutral every day for the next 11,000 days.

We can use the powers we have gained by leaving the EU, such as the ability to change VAT levies for certain products, to take a step closer to reaching our climate goals, and encourage the British public to do their part.

Families shouldn’t be taxed for choosing green options, and low-carbon technology must be affordable for everyone.

Bulb is passionate about ensuring that everyone is able to take part in the green revolution.

I greatly appreciate the significant steps that you and the government have taken to help the country recover from the COVID-19 crisis, and the world-leading commitments the UK has made to net zero.

I also recognise the strain this has placed on our public finances.

However, we must also consider how we can use the recovery to support families and consumers, encouraging them to make decisions that help to fight the climate crisis.

Yours sincerely,

Hayden Wood, Co-founder and CEO of Bulb

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