Ending repairs VAT ‘would create jobs in reuse sector

Value added tax should be dropped on repairs to buildings and electronic items after Brexit, environmental group Green Alliance has said.

It said that setting a zero rate of VAT - which cannot be done under EU rules - would encourage repair and reuse and could create 34,000 new jobs in the repair sector and 312,000 in remanufacturing.

VAT on materials and products that could be repaired had created a perverse incentive to buy or build new ones, Green Alliance said it its policy paper Improving the Environmental and Social Impact of UK VAT.

This said the UK created more e-waste per capita than any other country except Norway at 23.9 kg per person, per year, against an EU average of 16.2 kg.

Libby Peake, head of resource policy at Green Alliance, said: “This Brexit boost for the repair industry should be a no-brainer for the Government at this point.

“It has repeatedly said that leaving the EU will give the UK freedom to map its own path. Reforming VAT is an opportunity to show what that means in practice, and zero-rating repairs will have the added bonus of cutting waste and creating new, reliable jobs.”

The report said because VAT is charged on both labour and capital, it disadvantages activities that are labour intensive such as electronic goods repairs.

Lack of affordable repair services in turn encourages unnecessary waste but zero-rating WEEE repairs would help to create new jobs at a time when unemployment is rising because of the economic impact of coronavirus.

VAT is charged on building renovation and repairs but not new building, which the Green Alliance said made upgrading energy inefficient homes unduly costly.

Many older building were left vacant or demolished unnecessarily creating construction materials waste

Orginal Source