Accountants slam green tax break “gulf”

An accountancy firm has accused the Government of “hijacking” environmental concerns in order to swell Treasury coffers.

The Coalition Government should redress the imbalance between the huge amount it collects in green taxes and the tiny fraction it gives back in green tax reliefs, according to UHY Hacker Young, the accounting group.

According to research from UHY Hacker Young, green tax breaks are just 3.5 per cent of the amount raised in green taxes. The Government took £31.6 billion pounds in green taxes but gave back only £1.1 billion in green tax breaks in 2009/10.

The firm says that while the Coalition has already promised to hike green taxes, it has made no commitment to boost green tax breaks, sparking fears that green tax breaks will shrink as a percentage of green taxes.

It says that if the Coalition is serious about tackling climate change it needs to do much more to incentivise environmentally responsible behaviour by boosting green tax breaks rather than simply raising tax on polluters.

Clive Gawthorpe, tax partner at the firm, said, “The Government should redress this huge imbalance between how much people pay in green taxes and the amount they get back through green tax breaks. At the moment it’s all stick and very little carrot. Environmentally conscious taxpayers deserve a fairer reward.

“There is a concern that the new Office of Tax Simplification will scrap tax reliefs in its quest to simplify the tax system. The Government should consider ring-fencing green tax reliefs from its remit.

“The gulf between green taxes and green tax breaks is so vast that you have to wonder whether the green agenda is being hijacked simply to swell Treasury coffers. It’s very easy for the Government to relentlessly raise tax under the socially acceptable guise of fighting climate change.”