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The Government has increased green taxes by 9.1% over the past year, from £26.8 billion to £29.24 billion, according to UHY Hacker Young.
The accountancy firm has criticised ministers for giving back just £607 million (2%) of the revenue in eco tax breaks — which the company has described as 'a drop in the ocean' compared to the £2.4 billion rise in green levies.
According to UHY Hacker Young research, 91% of businesses believe the Government is using money raised through green taxes to help meet the shortfall in public finances, instead of using it to tackle climate change.
The figures also claim that the 91% businesses want to see green tax revenue ring-fenced for tackling climate change, to prevent it from being used for general expenditure.
UHY Hacker Young tax partner Roy Maugham said: 'The Government would make its green tax policy revenue neutral by balancing green taxes with green tax breaks if its motives were not principally financial.
'It's all very well punishing polluters, but what about actually encouraging environmentally responsible behaviour and reducing the tax burden at the same time?'
He added that ministers need 'to publish clear audited figures that show exactly where taxpayers' money is spent. The concern is that revenue raised from green taxes is being used to fund Government pet projects, such as ID cards and the Trident missile project.'
UHY Hacker Young has suggested encouraging green behaviour with an emphasis on individual taxpayers as well as companies. For example, the Government could also negotiate a widening of VAT exemption with the EU, so that it applies to bicycles and very low-emission cars.
More could be done to reward individuals who use public transport, said Roy Maugham.
'Environmental taxing is often too indirect,' he said. 'If you buy a car you consider the upfront cost of the car, not the vehicle excise duty that gets tagged on afterwards.'
