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Community energy sector drops threat of legal action on tax relief

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Community Energy England (CEE) have dropped their recent threat of legal action against the Government over the removal of tax relief from community energy enterprises.

In a reply to CEE’s initial pre-action letter, HM Treasury has said that it gave just five weeks’ notice of the change, in comparison with the six months’ notice originally promised in the UK Budget.

However, in an earlier ministerial statement, government lawyers claimed that simply “monitoring” the schemes had in effect given community energy enterprises notice that the policy might be changed prior to the grace period.

The community energy sector rejected the Government’s claims, but would not pursue the matter to judicial review.

CEE chairman, Philip Wolfe, said: “We’re disappointed that HM Treasury refused to provide the results of its monitoring to justify its U-turn.

“It offered just one document, but only if we kept it secret. This isn’t a national security matter, so we’ve concluded that the evidence is too weak to be published.”

However, Mr Wolfe expressed a desire to “help the Treasury become better informed about the benefits of bona fide community energy schemes so it can reconsider its approach to Social Investment Tax Relief (SITR) when this is expanded in 2016”.