To tackle fuel poverty and reduce energy consumption, the National Housing Federation believes housing associations should be charged a reduced VAT rate of 5 per cent on any work that results in an improvement to the energy efficiency.
We warned the Chancellor that tax rules are hindering the efforts of housing associations to solve the country's housing problems.
Our Pre-Budget submission argued that the VAT system should be reformed to promote more energy efficient homes and help combat fuel poverty.
There is currently a reduced VAT rate on the installation of some energy saving materials, such as solar panels. But other energy saving adaptations - such as the installation of good quality insulation or double-glazing - are charged the full rate of 17.5 per cent.
Housing associations already set a high standard for greener housing; a reduced VAT rate would act as a powerful incentive for them to do even more work to improve the energy efficiency of existing homes.
Bob Wilson, the Federation's Assistant Director - Market Intelligence, said:
"There are currently VAT concessions on fitting homes with some energy saving materials. We say housing associations should benefit from a 5 per cent rate of VAT on any refurbishment that makes a home more energy efficient. It would really assist us in our efforts to provide greener homes. It would also help us to drive down heating bills and lift tenants out of fuel poverty."
Visit our website which has details of action you can take including contacting your local MP and asking them to write to the Chancellor.