Treasury: “We can’t cut VAT on recycled products”

The Treasury has crushed hopes the UK could slash the amount of VAT tax on recycled products. Last week MPs put forward the idea as a way to reduce wasting […]

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By Vicky Ellis

The Treasury has crushed hopes the UK could slash the amount of VAT tax on recycled products.

Last week MPs put forward the idea as a way to reduce wasting useful resources like metals.

They found in a report only a fraction of British rubbish is being recycled.

A Treasury spokesperson said: “EU VAT agreements do not enable us to introduce a reduced rate of VAT on recycled products.”

In order for recycled products to qualify for a cut-price VAT, they would have to be on an EU list of goods, the Annex III of the principal VAT Directive.

This would need a proposal from the European Commissions and unanimous agreement from EU member states.

Recent talks on the issue suggest this is unlikely.