As a business owner you may already be aware that VAT has been reduced to 5 percent already in some fields of business in the UK. The Government, in fact, has been gradually reducing the rate from 1998 onwards until it reached 5 per cent for installation by professional installers of some energy-saving materials. Insulation installation also benefitted from this break. This VAT rate reduction reveals an appreciation of the incentivizing powers of this option. Homeowners, however, remain excluded from the benefits enjoyed by professional installers, should they opt to do the installation work on their own. The environmental benefits of the UK government reducing VAT on all insulation work to five percent would also benefit excluded classes, including homeowners.
One group left out is the householder. Yet, under the credit crunch and falling market price of houses era we face, householders are likely to go the do it yourself route. Not surprising the Construction Products Association has seen the light and said it supports the extension of the reduced rate to those who decide to do renovations this way.
The thermal insulation market has already shown its responsiveness to favorable regulation and a rise in energy prices. By extrapolation, an extension of the 5 percent rate would lead to a further boom. In fact, a trial has already demonstrated the practical potential of this theory. The consequent loss in CO2 emissions would be environmentally beneficial.
The Construction Products Association has stated that many householders are capable of installing insulation themselves and yet they are paying the full rate of VAT on a product the Government must want to encourage them to buy. It is known that buildings are the largest single energy-using sector, accounting for 40 percent of energy consumption in Europe. Insulation is a highly cost-effective end-useful measure in reducing the emissions of green house gas emissions.
A study commissioned by EU has found that a reduced VAT rate on insulation products might not be passed through fully by installers to the consumers. Despite the rate cut for commercial installation, this is one reason it has been surmised why the uptake in the UK market has been low. This is because since the installer purchases the product on behalf of the residential customer, the reduced rate may not be clearly apparent to the end consumer. Of course, when the residential owner is the installer, this is not the case.
The tax revenue increase of a reduced rate in the Isle of Man indicates the economic benefits that may be achieved. There were also improvements in the current stock of housing and a reduction of pressure on development of green field sites. Yet, the UK government has not learned from the example of the Isle of Man. Were the Government to change its policy, it would signal the Government supports the role of consumers doing their part to help the environment this way, as they also help their own checkbook. Such action would encourage sustainable consumption. Installation of insulation reduces the use of heating fuels and the resultant savings are beneficial from the perspectives of both environmental impact and economic gain.
One group left out is the householder. Yet, under the credit crunch and falling market price of houses era we face, householders are likely to go the do it yourself route. Not surprising the Construction Products Association has seen the light and said it supports the extension of the reduced rate to those who decide to do renovations this way.
The thermal insulation market has already shown its responsiveness to favorable regulation and a rise in energy prices. By extrapolation, an extension of the 5 percent rate would lead to a further boom. In fact, a trial has already demonstrated the practical potential of this theory. The consequent loss in CO2 emissions would be environmentally beneficial.
The Construction Products Association has stated that many householders are capable of installing insulation themselves and yet they are paying the full rate of VAT on a product the Government must want to encourage them to buy. It is known that buildings are the largest single energy-using sector, accounting for 40 percent of energy consumption in Europe. Insulation is a highly cost-effective end-useful measure in reducing the emissions of green house gas emissions.
A study commissioned by EU has found that a reduced VAT rate on insulation products might not be passed through fully by installers to the consumers. Despite the rate cut for commercial installation, this is one reason it has been surmised why the uptake in the UK market has been low. This is because since the installer purchases the product on behalf of the residential customer, the reduced rate may not be clearly apparent to the end consumer. Of course, when the residential owner is the installer, this is not the case.
The tax revenue increase of a reduced rate in the Isle of Man indicates the economic benefits that may be achieved. There were also improvements in the current stock of housing and a reduction of pressure on development of green field sites. Yet, the UK government has not learned from the example of the Isle of Man. Were the Government to change its policy, it would signal the Government supports the role of consumers doing their part to help the environment this way, as they also help their own checkbook. Such action would encourage sustainable consumption. Installation of insulation reduces the use of heating fuels and the resultant savings are beneficial from the perspectives of both environmental impact and economic gain.
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