BRC calls for VAT change on energy-efficent appliances
August 24, 2009
VAT should be removed entirely from energy-efficient appliances and a car industry style scrappage scheme considered. This would help households cut their fuel bills by switching to low emissions-generating products.
This was the gist of a call from the British Retail Consortium (BRC) to Chancellor Alistair Darling this week, as it set out its priorities for "a balanced approach to sustainable recovery", ahead of this autumn's Pre-Budget Report.
The BRC's plan for creating incentives for households to improve their energy efficiency is one of a set of proposals in the document.
These are designed to support retail jobs and job creation, revive high streets and promote retail investment - as well as tackle climate change and reduce customers' fuel costs.
In its submission to the Chancellor, the BRC said: "A clear signal should be given to households of the benefits of a switch to the most energy-efficient products…this could be kick-started through time-limited scrappage schemes for those buying 'Energy Saving Recommended' products."
Independent economic modelling for the BRC has indicated that carbon dioxide emissions could be reduced by 1.3 million tonnes each year by 2020 as a result of removing VAT from today's most energy-efficient equipment.
In the UK, there are 15 million fridges, freezers and washing machines over 10 years old.
The reform would cost £507 million per year in lost VAT receipts, roughly equal to the cost over just two weeks of the across-the-board VAT reduction introduced last December.
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