VAT should be ‘scrapped on green appliances’

VAT should be scrapped on energy-efficient household appliances, the British Retail Consortium (BRC) has said.

In its Pre-Budget submission to the Chancellor, the BRC is calling for the tax to be removed from ‘green’ appliances to help curb carbon emissions and cut fuel bills.

It claims the move, which would cost around £507 million per year in lost VAT receipts, could reduce the UK’s CO 2 output by 1.3 million tonnes each year by 2020.

In addition, the Consortium suggests introducing a car-industry-style scrappage scheme to encourage consumers to switch to more environmentally-friendly white goods and help the Government achieve its targets for lowering carbon emissions.

Stephen Robertson, from the BRC, said: ‘The Government's working against its own objectives when it sets targets for reducing carbon emissions while charging full VAT on the efficient products that will move us towards those targets.’

He added: ‘Retailers are already doing their bit to cut carbon but homes are responsible for 27% of the nation's emissions. Helping householders improve their performance has to be the next step.’

Other key proposals in the BRC’s Pre-Budget submission include abolishing the 0.5% increase in national insurance planned for 2011, improving support for the British high street and scrapping plans to impose workplace parking charges.