Community energy groups threaten legal action over tax relief cuts

Community Energy England (CEE) has served the Treasury a ‘Letter before Action’ over plans to end tax relief later this month.

The group, which represents community energy groups across served the letter yesterday (24 November) in accordance with the Pre-Action Protocol for Judicial Review.

Public Sector Energy reported last month the Government plans to end Enterprise Investment Scheme (EIS) and Social Investment Tax Relief (SITR) for community energy enterprises later this month.

Community Energy Scotland and Community Energy Wales, who are working with CEE, confirm their purpose in taking this action is to make clear to the Government how seriously their collective members could be affected if Government reneges on its promises in this way.

“Our letter gives HM Treasury a final opportunity to reconsider its position in light of the legitimate expectations of the community energy sector arising from Government statements in the 2015 Budget,” said CEE Chairman Philip Wolfe.

“We have not taken the decision to challenge lightly, but believe it is important to seek the regulatory consistency necessary to inspire the billions of pounds of investment, which sustainable energy infrastructure needs to survive and thrive over the next decade and more.”

The pre-action letter was served by law firm Bates Wells Braithwaite, whose Public & Regulatory Law Partner, Selman Ansari, pointed out that the Government’s change in approach had not been supported by any ministerial announcement, evidence or consultation. 

“After the budget statements, community energy groups had a legitimate expectation that the tax regime would remain unchanged for at least six months,” said Mr Ansari.

“The unexpected changes which Treasury now proposes could jeopardise all their investment in projects being developed on that understanding.”

Public Sector Energy is awaiting a response from the Treasury. 

Jamie Hailstone is a freelance journalist and author, specializing in local government, transport and energy issues