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|Net zero and the tax system||1013.99 KB|
The UK has committed to a wholesale transformation of its economy to become a net zero greenhouse gas emitter by 2050. An earlier 2020 report on how the government could meet this target stressed the crucial role the Treasury would need to play in that transition. Developing a net zero tax strategy was part of that.
With COP26 less than three weeks away, (UK Chancellor) Rishi Sunak’s forthcoming budget must set out a coherent tax strategy to help the UK transition to a zero carbon economy. Failing to set out a clear and consistent approach to reaching net zero will raise the costs of the transition.
The Chancellor has so far been silent on how the tax system could be used to support businesses and households to make the transition, and the Treasury’s net zero review – promised for spring 2020 – has still not been published. Current concerns over rising energy prices for both households and businesses, and fuel shortages may provide a further excuse for inaction.
This report recommends that the UK Treasury should: