‘Government must remove VAT on retrofits and help digitalise construction sector’

A new report by Green Alliance calls on the government to support digital technologies to help the sector recover and drive towards net zero

Festival Net Zero 2021

A new report urges the UK Government to roll back VAT on building renovation activities to help reboot the construction sector and drive towards net zero.

Independent think tank Green Alliance states that a 20% VAT on repair and renovation work discourages upgrades to existing buildings and incentivises new constructions, contributing to a higher carbon footprint.

The study refers to the UK’s commitment to building a zero-carbon economy by 2050 and warns that unless more existing buildings are renovated, the target could be missed.

The think tank has recommended £300 million should be invested to carry out energy-efficient retrofits on existing buildings in a bid to deliver more net-zero homes in line with the 2050 target.

It also calls for the adoption of digital technologies to improve performance and reduce the sector’s impact on the environment – the use of digital technologies are expected to further improve the accuracy of energy-efficient upgrades and reduce operational costs.

Caterina Brandmayr, Senior Policy Analyst at Green Alliance, said: “As the UK looks to build back better post-Covid, businesses should be investing in those smart low carbon supply chains that will be in high demand in the future and shield the sector from further disruptions down the line.

“To make this a reality, the government should start by removing the tax disincentives that are stopping the renovation and repair of existing buildings and scale-up deep retrofit solutions that will create high skilled jobs across the country.”

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