In June, 25 organisations signed a letter to the Department for Environment, Food and Rural Affairs (DEFRA), calling for a VAT exemption on reused and repaired electronics. Signatories included household names such as Currys, Beko, and Hotpoint, alongside repair platforms, recycling firms, and national repair café networks. Their message was clear: sustainable products and services must be made more accessible.
A tax barrier to reuse
The UK currently produces the second highest amount of e-waste per person in the world, yet repairing or buying second-hand remains relatively expensive. High VAT rates on repairs and refurbished goods are one reason why many households continue to choose replacement over reuse – even when reuse would be more sustainable.
According to the coalition, removing VAT would encourage more people to extend the life of their products, reduce unnecessary waste, and ease financial pressure on families. It would also help cut demand for raw materials, much of which is imported at environmental and economic cost.
This call for tax reform aligns closely with recommendations made in a recent report from the All-Party Parliamentary Group (APPG) on the Environment. The report, ‘Kickstarting the Circular Economy’, points out that UK resource use is twice the level considered environmentally sustainable. It argues that better product design, stronger repair rights, and support for circular business models are vital to reducing this footprint.
Economic case for reform
Alongside the environmental gains, supporters of the VAT cut highlight strong economic potential. The repair economy could generate 31,000 jobs by 2035, growing to over 80,000 by 2040. And if supported by ambitious policy, up to 13 million reusable electronics could be kept in circulation each year.
The APPG report suggests that reforming how products are designed, reused, and repaired could boost UK GDP by £25 billion by 2035, while also reducing emissions equivalent to shutting down 20 coal-fired power stations.
Removing VAT is seen as a first, low-cost step to unlock these benefits. It would directly support repair businesses, resale platforms, and manufacturers willing to embrace durability and modular design.
Impact on manufacturers
For manufacturers, a shift toward reuse and repair will come with challenges, but it will also offer opportunity. As public policy and consumer expectations evolve, manufacturers may be increasingly expected to design products that last longer, are easier to repair, and can be refurbished cost-effectively.
The APPG’s report encourages the UK to go beyond minimum EU repairability standards, suggesting that extended producer responsibility could be used to make manufacturers more accountable for how long their products stay in use. This approach could help level the playing field between businesses already investing in circular solutions and those still relying on linear models.
The report also notes that circular design is not just about sustainability; it’s a potential driver for innovation, skills development, and long-term resilience in UK supply chains – particularly as global access to critical materials becomes more volatile.
A wider strategy
These proposals form part of a broader push for a UK Circular Economy Strategy. Campaigners successfully lobbied to have electricals included as one of the priority areas in the Government’s Circular Economy Taskforce, after initial plans left it out. Nearly 70 MPs have now endorsed stronger policy support for reuse and repair.
The combination of industry support, public backing, and parliamentary interest suggests that the political climate for reform is changing. For businesses already engaging in refurbishment and resale, a VAT exemption could be a timely and practical incentive.
With the Government seeking ways to support green growth, reduce waste, and strengthen economic resilience, scrapping VAT on repaired and refurbished goods may prove to be a small tax change with a big effect.
