- Arrival is one of 30 companies calling for the UK’s VAT rate to be dropped to zero from 20%.
- The green businesses have written a letter to the Prime Minister calling for “urgent action.”
- They claim the UK can only now reduce the tax rate as a result of leaving the European Union.
- See more stories on Insider’s business page.
Electric vehicle company Arrival is among a host of companies pushing British Prime Minister Boris Johnson to drop VAT on all green products.
Arrival, which became the UK’s largest-ever listing in history when it went public on the Nasdaq last month, is one of 30 businesses that have signed a letter to Johnson calling for “urgent action.”
The UK was one of the first major global economies to commit to reaching net zero carbon emissions by 2050 but the government has faced widespread criticism for its “disappointing progress” in meeting the lofty goal.
In the letter, which was also signed by renewable energy firm Bulb and supply chain firm Circulor, the UK government was urged to make green products “more affordable” by reducing the VAT rate charged on them to zero.
The tax exemption should be extended to everything from electric vehicles and charging technology to double glazing windows and low-carbon boilers, the companies said. Britain imposes a full 20% VAT rate on a host of energy-efficient products.
Arrival’s head of sustainability Jon Steel told Insider it was clear that a “coordinated effort” was needed across all sectors.
“Removing VAT on products that contribute to this transition is a simple and universal approach which resonates with our objective to remove the cost barrier to electric vehicles,” he said.
“Governments around the world are exploring many different approaches to incentivize low-carbon technology, and we would encourage simplicity and consistency while considering the effects on all demographics to ensure an equitable transition.”
A spokesman for the Treasury said the government was “committed to building back better and greener from the pandemic.”
“The prime minister set out our ten-point plan to drive forward a green industrial revolution, and the Treasury’s net zero review is looking at how the transition to net zero could be funded and assess options for where the costs will fall,” the spokesman said in a statement to Insider.
The letter to the prime minister comes ahead of the UN Climate Change Conference (COP26), which is due to be hosted in Glasgow in November. During the conference, the UK will take member states to task on their progress towards the Paris Agreement, which the US famously exited under former president Donald Trump. America has since rejoined the agreement under President Joe Biden.
In the letter, the businesses said they were “disappointed” with the lack of policies available to people that wanted to “play a part in reaching net zero”.
“With just months until COP26, we’re writing to ask you to take urgent action to make green products more affordable by reducing the rate of VAT charged on them to zero,” the companies said.
“This would make green technology cheaper for millions of households, and is only possible now we’ve left the EU.”
Arrival’s involvement in the letter adds weight to the campaign to drop VAT on green products in order to speed up Britain’s progress towards a net zero economy.
The electric vehicle company, which builds buses and vans for commercial uses, went public in March through a special purpose acquisition company (
) called CIIC Merger Corp. The deal valued Arrival at over $13 billion, making it the most-valuable listing by a British company in history, according to Dealogic.
Arrival is headed up by Russian tycoon Denis Sverdlov, who still owns around three quarters of the firm. CIIC was set up by Peter Cuneo, who previously headed up Marvel.
The company has also recently landed a deal to build vans for UPS in an agreement that could be worth up to $1 billion.
You can read the full letter to Johnson below.