Green house upgrades are hobbled by VAT rules | Letter
Green house upgrades are hobbled by VAT rules | Energy efficiency | The Guardian
Re upgrading houses rather than building new ones ( Letters, 18 October), in a Covid lockdown-induced fit of enthusiasm, we decided to retrofit our 1920s house to the Passivhaus Institute’s new EnerPHit standard. Thanks to an exceptionally dedicated builder, we’ve been able to hit the full Passivhaus energy standards.
If we’d knocked our house down and built a new one, the whole build would have been zero-rated for VAT. But for retrofit, the VAT regime is very different. For example, a few specific energy-saving materials are exempt, but the cost of the significant labour needed to achieve airtightness isn’t. And you might be able to claim VAT offset if you’re upgrading the roof only to improve its energy efficiency, but any other contributory reason is likely to mean the whole work is VAT-able. And the onus of proof is on the contractor. Luckily we found one of the few who enjoys this sort of challenge.
Why not make the process target-based, with VAT exemption if measurable energy efficiency targets are hit? Such a system might also incentivise the trade to take construction detail more seriously.
Deborah Henderson
Oxford
Related Knowledge Center: Climate economics
Climate change is now a driver of the world’s economy. The impact is profound:
- Catastrophic weather events — hurricanes, floods, droughts, high temperatures — are more frequent and more extreme. The cost can be measured in both the initial damage caused and the longer-term impact on the economy.
- Vulnerable communities are increasing climate-related investments, hardening infrastructure and taking other protective measures.
- Investment in carbon capture and storage technologies is increasingly rapidly.
- Governments are making investments and crafting regulations to reduce emissions of carbon dioxide and other greenhouse gases.
On top of all of this is the cost of uncertainty. As the Fourth National Climate Assessment, released in 2018 by the U.S. Global Change Research Program, says, “The assumption that current and future climate conditions will resemble the recent past is no longer valid.”