The UK’s largest home improvement and garden center retailer, believes energy saving should be affordable for all and found 95 per cent of its customers agreed when surveyed that reducing VAT would encourage them to buy energy efficient products. A view now supported by the Government.
A recent letter from the Treasury has recognized that energy efficient products, not currently in scope for the VAT reduction, ‘may play a major role in reducing household energy use’ and are being kept under review. The letter states
“…the Government remains committed to meeting environmental challenges and recognis that other items (non installed) are energy efficient and may play a major role in reducing household energy use and increasing the energy efficiency of existing homes. The Government keeps the reduced rate tax under review and will consider carefully the proposals to lobby our EU partners for extensions to the scope of the reduced rate.”
The petition for customers, colleagues and MPs to sign has been met with enthusiasm, with B&Q’s in-store Green Piggybanks and its online petition having been filled with in excess of 25,000 signatures all lending support to the green initiative.
With a month to go before the petition is presented to Government, an online viral has been launched by B&Q on Facebook, Twitter and YouTube to encourage the online community to also sign the petition and sow their support.
B&Q has evidence that price reductions significantly drive up sales of energy saving products like insulation and light bulbs and believe the VAT reduction will go a long way in making energy saving product more affordable. There is real urgency to this - the UK and the EU will miss their carbon reduction commitments if they fail to make it easy and affordable for people to make their homes more energy efficient.
Matt Sexton, Director of Corporate Social Responsibility at B&Q says; ” We’re committed to making it easier for our customers to green up their homes and we believe the Government and the European Commission must do more to help us make energy saving products affordable for all by cutting the VAT to five per cent on energy saving goods. That’s why we urging people to sign our petition which we will present to Government next month.”
B&Q and its parent company, Kingfisher plc has been pressing the Government and the European Commission for over five years to reduce the VAT on green goods.
VAT is currently charged at the reduced rate for certain energy saving goods and services, but only if these are professionally installed by a third party. Examples include solar panels and insulation materials. If somebody wishes to buy goods and services of this kind and fit them to their own home themselves, VAT is charged at the standard rate.
Boilers, including very efficient combi-boilers incur VAT at the standard rate unless they are installed under a Government grants programme and there are some energy efficient products that are charged at the full standard rate in all cases, such as low energy light bulbs. There is also currently no VAT reduction for the electrical goods that are the most energy efficient in their product category e.g. goods that are A rated.
Log onto www.facebook.com/bandq to see the viral and sign up to the petition.
VAT is an EU-wide tax on goods and services. The European Commission gives Member States some discretion as to which goods and services incur VAT, and at what rate, but all Government decisions have to be approved by Brussels.
Some goods and services are either zero-rated (e.g. children's clothes, water supply and medical treatment) or are charged at either the standard or the reduced rate.
In the UK currently, the rates are as follows: Standard: 20%. Reduced: 5% Domestic energy use accounts for roughly 25% of the UK’s greenhouse gas emissions (source: HMT, Budget 2007).
The British Government wants to be the first EU Member State to phase out the sale of traditional, inefficient incandescent light bulbs, by 2011 (under new EU regulations, the sale of all incandescent light bulbs must be phased out by 2012).
Across the EU, household products account for 16% of total energy use and 10% of EU greenhouse gas emissions (source: Euro Coop).
Price is, obviously, a key factor in influencing purchasing decisions. Research by DEFRA shows that 42% of UK consumers would buy more efficient products if they were cheaper.
Source: B&Q via Z-PR
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