The rich benefit most from a de facto subsidy for home heating, a report says. The paper from the think tank Green Alliance makes the point that heating gas incurs VAT at only 5% instead of the usual 20%. Because the wealthy own the biggest houses, it says, they gain twice as much as the poorest from low VAT. The report suggests increasing VAT, then using the proceeds to insulate the homes of the poor. It also recommends increasing their benefits. The low VAT level on gas and heating oil is seriously hampering the UK’s ability to cut carbon fast enough to tackle the climate emergency, the authors say. Their new analysis says the government is still effectively subsidising domestic gas and other heating fuels to the tune of £2.2bn a year through the discounted VAT rate.
BBC 24th Sept 2020 read more »