TaxAdministrationGreen VAT cut may see wave of tribunals

Green VAT cut may see wave of tribunals

The chancellor’s announcement of a 5% VAT for environmentally-friendly goods could see companies in endless rows with HM Revenue & Customs over what constitutes a green product

‘The scenario is not entirely unrealistic,’ Deloitte VAT and environmental
taxes commentator Daniel Lyons said this week.

VAT tribunals are constantly forced to rule on what products qualify for
lower VAT rates, deciding on whether something is a soup or a fruit drink, for
instance.

‘I suspect the government will mention exactly which goods would fall under
the environmentally-friendly category, and won’t use that term at all,’ said
Lyons.

PricewaterhouseCoopers green tax expert, John Manning, said the lack of
detail in the budgetary notes on the 5% rate was due to the fact that the
Treasury still needed to get the green light from the European Union.

Land-fill tax was hiked by 33%, raising an extra £500m to 2010.

‘This is government recognising that this has perhaps been the most
successful of all environmental taxes, and capitalising on that,’ said Manning.

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