The favourable five per cent VAT rate on ground source and air source heat pumps, biomass boilers and solar thermal panels was due to rocket to 20 per cent in line with a European Court ruling from August 1 2016.
But in an amendment to the Finance Bill, a cross party group of MPs objected to the move and now Downing Street has said it will not oppose an amendment to the Bill to retain the five per cent sweetener for going green.
And, at the same time, the European Commission has said it will bring forward proposals to allow “flexibility” in the VAT rates applied to different products within EU countries.
Michael Wright, owner of Yorkshire Heat Pumps, said: “We are delighted that it appears the five per cent reduced rate on renewables may be here to stay. Putting up the rate would fly in the face of attempts to promote sustainable living and thwart the drive towards hitting the UK’s carbon reduction target.”
Yorkshire Heat Pumps supplies and installs ground and air source heat pumps and biomass boilers from its Harrogate base. Run by Michael and Kate Wright, the company prides itself on the quality of its installations and unparalleled customer service and care.