VAT changes proposed to encourage sustainable consumption

Date: 21st August 2008

A government committee has suggested that VAT should not be added to the cost of repairing electrical goods such as TVs, fridges and vacuum cleaners.

The House of Lords science committee said that removing VAT from the cost of repairing electrical items would help destroy the 'throwaway culture' that currently exists in the UK.

It is also hoped that such a move might encourage manufacturers to alter their business model to foster more sustainable consumption.

What's more, the committee said that VAT charges for clothing should be altered "so products which use sustainable materials and less virgin raw resources are made a more economically attractive proposition".

Committee chairman Lord O'Neill commented: "We would also like to see the VAT regime reformed so that products that have a long life cycle or can be easily and cheaply repaired rather than replaced are made economically more attractive.

"This would be an important step in turning away from the 'throwaway' consumer culture we currently have."

Recently, a Times journalist revealed that he had been told by HM Revenue & Customs (HMRC) that it is not right for restaurants to add VAT to 'optional' service charges.