25 organisations call on UK ministers to remove VAT on refurbished and repaired goods.
A coalition of 25 UK organisations and businesses has called on the government to remove VAT from refurbished and repaired electronic goods, arguing the tax penalises sustainable consumer choices and hampers the development of the circular economy.
In an open letter addressed to Environment Secretary Steve Reed, the group, including retailers such as Currys, marketplace Back Market, waste firm Suez UK, and grassroots initiatives like the Restart Project and repair cafés, urges a rethink of the current 20% VAT rate applied to refurbished goods and repair services.
The coalition argues that a VAT exemption would make reuse and repair more affordable, help address the UK’s growing electronic waste problem, and support the creation of green jobs. But the implications go beyond just household gadgets.
For the imaging sector, VAT relief on remanufactured printer cartridges could significantly narrow the price gap with new-build compatibles and OEM products, increasing uptake and improving margins for legitimate remanufacturers. Currently, remanufactured consumables are subject to full VAT charges, despite offering substantial environmental benefits over single-use alternatives.
“The principle is simple,” said one industry commentator. “If it’s greener to reuse than to replace, tax policy should support that, not make it harder.”
The UK lags behind several European countries that already apply reduced VAT rates to encourage reuse.
- Sweden reduced the VAT on repairs of appliances, bikes, and clothing from 25% to 12%, and offers tax deductions on labour for repairs of white goods.
- France applies a 5.5% VAT rate on certain electronics repairs and offers direct subsidies through its national repair bonus scheme.
- Belgium and Portugal also offer reduced VAT on clothing, shoe and bicycle repairs, while Hungary has piloted zero VAT on some household repair services.
A 2022 change to EU VAT rules gave member states flexibility to reduce VAT for services that benefit the environment. The UK has not yet followed suit.
David Connett, Partner at Connett & Unland GbR, specialists in the imaging sector, reuse and policy, said the right VAT treatment could unlock economic and environmental benefits without cutting overall tax revenues.
“If the UK wants to grow its repair and reuse sector, VAT is one of the clearest levers available. Cutting or removing VAT on refurbished goods and repair services would stimulate growth in the circular economy and support skilled jobs. But any new VAT treatment should be fiscally neutral. The government could balance the system by introducing a higher VAT rate on products where a viable circular market already exists. That would reward reuse without reducing overall tax revenues.”
While the full letter has not yet been published on the signatories’ websites, the story was first reported by The Guardian.
