Community Energy England (CEE) has sent a letter calling for a judicial review into UK government plans to exclude community energy projects from the Enterprise Investment Scheme (EIS) and Social Investment Tax relief (SITR) from this month.
The group served HM Treasury with a ‘Letter before Action’ yesterday in accordance with the pre-action protocol for judicial review challenging the implementation of proposed changes.
HM Treasury plans to stop projects from 30 November this year, adding that community schemes will also be prevented from getting Social Investment Tax relief (SITR).
The announcement – made by the Financial Secretary to the Treasury during the report stage of the Finance Bill in October – means that community energy organisations which benefit from subsidies for the generation of renewable energy will no longer be eligible for any tax-advantaged investment for investment made on or after the November date.
Share offers will need to be closed and shares issued by 30 November 2015 for investors to qualify for the relief – even where investments have received advance assurance.
But CEE – in conjunction with Community Energy Scotland and Community Energy Wales – are hitting back against the plans with a legal challenge to make it “clear to government how seriously thousands of sustainable energy groups across the UK could be affected.”
CEE Chairman Philip Wolfe said” “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. 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.
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