The Confederation of British Industry (CBI) has implored Chancellor Rachel Reeves to initiate considerable tax cuts for manufacturers of electric cars, heat pumps, and biofuels, arguing that these measures are necessary to expedite the UK's journey towards achieving net zero emissions.
Rain Newton-Smith, chief executive of CBI, stated that these strategic tax measures would not only enhance the UK's attractiveness for investments in green technologies but would also play a critical role in fostering economic growth and stability during these uncertain times.
The proposed tax restructuring, including the 10% corporation tax rate for green technology companies, may entail a fiscal cost of £238 million, while the super-deduction is estimated to cost £389 million, according to CBI’s financial assessments.
The CBI is advocating significant reductions in VAT for public electric vehicle charging stations from 20% to 5%, which would amount to £33 million in lost Treasury income, as well as the elimination of VAT on home energy efficiency improvements.
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