ECJ ruling could force George Osborne to break his own manifesto pledge not to raise VAT

 

Millions of households across Britain face paying more for solar panels and home insulation after an EU ruling that could force George Osborne to break his manifesto pledge by raising VAT.

The European Court of Justice on Thursday ruled that the UK’s longstanding reduced five per cent rate of VAT on energy-saving products was in breach of EU laws.

The court said that the reduced VAT rate should only apply to social housing - raising the prospect that the VAT rate for all other homeowners would be increased to the usual 20 per cent.

This would add hundreds of pounds to the cost of installing home insulation measures and rooftop solar panels - despite the fact the EU has imposed renewable energy targets on the UK and wants the UK to improve its energy efficiency.

 

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