HM Revenue & Customs (HMRC) has reconfirmed its intention to implement a ‘tax lock’ until 2020, despite a European Court of Justice ruling which said that the UK’s lower VAT rate for energy saving measures was against its VAT directive.

The Tories have pledged that income tax, national insurance and VAT would not rise over the next five years. However, the ECJ ruling handed down earlier this month had called this pledge into question.

Speaking to Solar Power Portal, an HRMC spokesperson said: “The government has committed to a tax lock that will rule out rises in income tax, NICs and VAT during this Parliament and will deliver it.”

The department again stressed that it was studying the ECJ judgment carefully and “considering its next steps”.

Solar PV and thermal installs on residential accommodation in the UK currently benefit from a reduced VAT rate of 5% instead of the standard 20%, as well as other energy-saving measures. Commentators have raised concerns over the viability of the UK’s flagship environmental scheme, the Green Deal, questioning the impact a 15% VAT hike would have on the scheme. But Bernard Hughes, communications director at the Green Deal Finance Company, said that the government’s commitment to enact the ‘tax lock’ has helped allay concerns. He said: “The government has been very quick to say that it intends to stick to its triple tax lock of not raising VAT and is studying the decision before next steps.”

Hughes continued: “There is a long way to go in this debate and it is much broader than the Green Deal.”