BRC unveils new green VAT cut plans

Date: 20th August 2009

The British Retail Consortium (BRC) has provided details on its campaign to have VAT on green appliances reduced.

According to the group, introducing the tax reduction and a scrappage scheme for white goods which are ten years old or more, would benefit the environment and improve business competitiveness.

Under the proposals, VAT would be reduced from 17.5 per cent to zero for appliances which are exceptionally energy-efficient and receive an "A rating".

The scrappage scheme would see consumers get cash back for trading in older, more polluting white goods - such as fridges and washing machines.

A similar programme has already been introduced for cars.

Krishan Rama at the BRC said: "To get the A rating, manufacturers will further develop their technology, and they'll try and compete for that energy-saving recommended performance, to take advantage of the zero-VAT.

"What it would do is stimulate innovation amongst manufacturers."

Figures from the BRC suggest that, if its proposals are adopted by the government, 1.3 million tons of carbon emissions per year would be saved by 2020.