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Call to transform tax to encourage repair

September 25, 2020

Green Alliance, an independent think tank and charity focused on leadership for the environment in the UK is calling for the tax system to change to encourage reuse and repair.

With is latest publication “Improving the environmental and social impact of UK VAT”, Green Alliance is investigating how taxes can be applied in a way “to enable people to make more sustainable choices,” leaning on the Swedish system example.

The publication suggests that using BREXIT to overhaul the UK VAT system is a good start stating: “It is in the spotlight at the moment, as Brexit will allow more flexibility around how it is applied. Ministers have repeatedly said that leaving the EU will give the UK more freedom to map its own path. Reforming VAT is an opportunity to show what that means in practice.”

The project looks at housing, energy and specifically repair/reuse of electronics. It says that “the problem” as “VAT is normally charged at the standard rate for repairs which, combined with high labour costs, discourages people from mending broken items.” The research shows that “nearly two thirds of people in the UK think products are currently too difficult to repair.”

The publication points out: “The problem of electronic waste, for instance, is particularly acute in the UK, which generates more e-waste per capita than any other country in the world, apart from Norway. In 2019, the UK generated 23.9 tonnes of e-waste per person, against an EU average of 16.2 tonnes and a global average of just 7.3 tonnes per year.”

Green Alliance is calling for change: “As the UK will no longer be subject to EU VAT rules, it should zero-rate VAT on all repairs, potentially starting with high impact, frequently wasted products like electronics.”

“With a boost like this, many new jobs in the repair and remanufacturing industry would be created in all areas of the country. Combined with other policies to accelerate the circular economy, repair could create 34,000 new jobs as it would be needed in every locality. And a robust remanufacturing sector could support 312,000 new jobs.34 With unemployment rising because of the economic impact of coronavirus, an increasing proportion of these jobs will also be net jobs to the economy,” Green Alliance added.

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