UK electronics firms want government to stop taxing trash and let them fix it instead A newly formed group of UK electronics companies is advocating for the removal of VAT on electronic spare parts, repairs, and labor in the government's upcoming autumn budget, claiming this would encourage consumers to get kit repaired instead of replacing it. The group, which calls itself CLEAR (Circular Leadership for …
When VAT was removed from eBooks in 2020 the price of ebooks didn't drop at all and the publishers trousered the VAT "saving". When the 5% VAT was removed from tampons in 2022 the prices dropped about 1% with the manufacturers and shops taking the rest straight to profit. I can see why this group would like to see the same thing happen for their goods and services.
It sounds like a good idea in principal, but your eBooks example shows what will happen in the real world.
In addition, it will encourage repair firms to register for VAT instead of doing things under the table, simply because they can claim back the VAT on some services without paying it out. So it'll basically be taxpayers giving free money to repair shops and getting nothing in return, only legally this time.
> getting nothing in return
Except cheaper devices for those who can't afford new, less electronics in landfills, less toxic chemicals leaking into our environment, more jobs in electronics repair... need I go on?
Not every benefit to the country or consumer is a lower price than current.
The moment this went through we'd see a "repair" industry sprout up assembling "as new" devices from spare parts to avoid the VAT - a playbook as old as taxation. It will divert a few things from landfill I'm sure, but I'm even more sure it will divert a lot of VAT from the Exchequer.
Because
1) The ebook retailers don't set the price, it's set by publishers or SP Authors, which would be illegal in a physical shop. Apple, Kobo, Amazon, Smashwords/Direct2Digital, Google PlayStore Books.
2) Many were pricing by market perception and thus in countries with higher VAT not making as much profit.
3) Some used GBP inc VAT equivalent of US prices which never include Sales Tax as it varies dramatically by buyer's location and in some US locations it's zero. Those books have come down in price.
Note median UK author income for full time authors is about £7000. Also the majority of traditional paper published books don't recover the advance in royalties (though some might have made the publisher a profit). Publishing and authors are also under threat from so called AI, Internet Archive and Z Library. Also USA Libraries, unlike UK & Ireland, pay no per loan royalty.
I agree ending UK VAT on labour and parts for repairs might make no difference to the retail price, but might mean availability of repairs. Unlike nearly 40 years ago the amount needed to be charged simply to open the cabinet/case can now be more than the cost of a new gadget. If we go back 70 years, a 42" 4K TV is much harder to repair than a 1950s radio and in real terms cheaper. That's why people rented radios. People also often bought radio, TV, fridge, etc on HP, or rented cooker from gas or electric supplier. When ITV started in 1955 many had no TV or fridge. It didn't matter that the new 1955 VHF-FM radio only had 3x BBC stations because hardly anyone could afford it. Well off Irish people built masts and imported UK TVs and signals (no Irish TV till end Dec 1961 and one channel FM about same time).
Mostly, by volume. Few people upgrading or repairing their PC will be buying pallet loads of system board, gfx cards etc :-)
The sellers, who *are* possibly buying pallet loads of component parts/boards, will have to be audited. Even at a basic level, if someone is buying a pallet load of various PC parts and is clearly selling mostly ready-built systems and not paying any VAT is going to be a bit sus. But no matter the system, there will always be people trying to defraud it, so why not try it out and see what happens? I suspect the biggest problem will be drawing the line between what is a repair and what is a replacement. Is putting a new system board in a PC a repair or not? I repaired my old combi boiler years ago by replacing the stuck relay. It had to be done that day in the middle of winter, not next week when the supplier could eventually get around to delivering the £200 PCB, so I de-soldered the relay, found one that was electrically correct and used wires to attach it with heatshrink over the joints and then taped up to keep it in place. That was a repair, but would I get the full £200 PCB VAT free as a repair?
Try that with something like power tools where instead of single parts being available at a reasonable price, entire subassemblies are often supplied at silly prices which makes third party repair perfectly possible but often uneconomic. Eg switch fails on a drill and is a £5 part but the only spare "part" available is a subassembly of switch, controller, field, battery holder and wiring loom at £150 ... VAT reduction makes no difference to repairability as the producers want to sell tools cheaply constructed in China for maximum profit in the west, they have no economic interest in keeping those tools functional beyond the warranty period.
I'd like to present some counter arguments to the points you have made and it would be great if we could have a polite & civil discuss of each of these matters as I feel it is important that we value everyone's Input on matters like these where if things aren't fully considered then the economy could actually be negatively effected by such changes.
Firstly to counter your first point covering the price of eBook's and how despite a law being enacted in the UK that allowed eBook's to not need to pay a standard VAT rate as applicable to all types of Books be it Physical or Digital.
• While you are correct in that the eBook Distributors can set their own prices, that doesn't stop the eBook's publisher from rewriting agreements it has with those Digital Storefronts to stipulate that the VAT Savings must be passed along to the consumer allowing for lower pricing on eBook's than prior to implementation of the changes to the relevant Law & Regulations in the UK.
Despite their being no Legal Barrier stopping these savings from being passed on they still haven't made any significant difference to the price of eBook's for real paying E-tail customers.
This is a very good example of how a law with good intentions is instantly abused for corporate gain at the loss of both public funding reductions due to a loss of VAT from sales, and additionally no change in the sale price of the eBook's despite that benefit being the primary goal of the change to the regulations.
So to conclude my argument to the first point,
1• Existing Contracts can be rewritten to benefit consumers by passing along the savings, but they haven't.
2• This is a perfect example of a very similar type of change being made in Law and it was instantly abused, resulting in financial loss to the wider economy that was two-fold. Losses from lost VAT revenue, and Consumers still having to pay more for the same product.
Okay, now onto your second point;
How eBook eTail Digital Storefronts price their ebooks is largely down to what the market is willing to ultimately pay, and if they weren't charging higher prices in markets where the average wage is higher then it is market conditions that are ultimately influencing those decisions that are being made.
Remember that selling your eBook for 10p less profit than another market while still making a profit is a better deal than not selling any eBook's at all.
And now onto your third point;
The average yearly salary for authors has been on the decline for a century at this stage, and it is no surprise to anyone intelligent that the push into the digital age has rapidly accelerated that decline as people have been able to share information with each other through messaging platforms, video calls, phone calls, photos, and videos on social media platforms just showing off what they have been up to as part of their day-to-day life.
The value of Books today is not as great as it once was, and although they still have value that value is not as high as it used to be because information can be shared and taught through multiple other means.
And now onto something that I feel that you've misunderstood the purpose of, and it's value to international society (not just western nations).....
The Internet Archive.
The purpose of it's existence is in it's name. It is a digital archive who's intention is to retain copies of as much information as possible, be it literature, film, music, digital media, news articles, websites, and much more.
No other project around the globe does this, and the information it provides offers historians and researchers access to a wealth of historic information that is not accessible or available anywhere else on this planet.
The books it hosts have already had an opportunity to generate wealth from their existence, and to add to that, the people trying to access this information often have no wealth of their own and cannot afford the cost of outright buying some of these extremely expensive documents and records.
And how is documenting the content of a book any different to me doing the same with many books and then rewriting that information in my own words using the modern tools available to me and producing my own book & documentation which I charge no money for..... It would be the same core information but it wouldn't be owned by the publishers of the books that I read to.lesrn that knowledge.
The.purpose of knowledge is for it to be shared, not for it to be paywalled by some greedy and out-of-date publishers that have continually not paid their authors fairly for the work that those authors have produced.
It is like me blaming my local library for the fact that a Victorian Engineer isn't earning money from a Concept he developed 120 years ago that has since been surpassed and that I have iterated on, the dude is dead, the information is publicly accessible and I can learn it by reading a book or watching a video on if on a platform like YouTube.
The Logic behind making "The Internet Archive" an enemy is very short-minded, it's existence is far more than the sum of some books that some relic corporations own the original hard copy to reproduce it.
I await your replies to my counter arguments.
A 1950s TV was not as powerful, smart or had as many channels as today's equipment but I didn't need a specialist repair shop. When thumping it a bit in the right place didn't work I could open it up, remove the valve that wasn't working and buy another (often second hand), insert and the TV was repaired.
Now I doubt I could even get inside the case of our current TV.
There are some differences to consider. E-books are pure IP, with Amazon have centralized control and basically setting the prices for the whole industry. In contrast, repair and to a lesser extent recycling are labour intensive and distributed. About the tampons - shop prices rarely drop. However, that doesn't mean the price of tampons hasn't risen more slowly than it would have otherwise.
This is a false equivalence. Ebooks are a commodity where the price is driven by the market, and it's already as low as it can go. The high visibility of millionnaire celebrity authors drives an unrealistic perception of the economics of publishing that fails to reflect the truth for mid-list and self-published authors.
The truth is that publishing is often an act of borderline profitability where more than 90% of products fail to return a profit and less than 5% make a significant return, which is why publishing is often creatively conservative and incerasingly turns to those celebrities who have established market power. Inside the industry, the rates paid to editors, artists and other professionals continue to decline in real terms.
Bullshit. That's a convenient side effect, which they're hoping enough suckers in government will believe is genuine altruism. Their only real goal is to increase their profits.
(Edit: Upon rereading your post... apologies if it was sarcasm and actually making my point more succinctly than I can).
CLEAR group calls for VAT to be dropped on spare parts, repairs, labor
What has an Australian political party to do with a domestic UK issue?
This "International English" nonsense is starting to irritate me. In any case it should properly be called "American English".
As Nik 2 said in the Openreach reveals latest locations facing the copper chop thread courtesy should mean that UK spelling is used in a UK exclusive story
It's just a facade so as not to scare the USAians who are easily frightened, which means we can all have fun picking apart articles written by UK journos with Britishisms put through an American English spellchucker, engagement is up, everyone's a winner.
Let's just hope they don't screw the pooch too much like the other place did.
To the majority of USAians, there is NO WORLD outside the Lower 48. Alaska and Hawaii (other than in TV series) might as well be on a different planet.
Get real people. All the MAGA faithful care about is the OJ and hope that he will come to their county so that they can worship the ground he stands on.
I don't even bother to call it "American English" any more. Its just plain "American".
Since I was born and grew up in the UK I actually speak English**, in fact I rather jokingly claim to be bi-lingual. Although the languages sound the same if you use English in the US then you may well find difficulty being understood. Americans not only have a different, and often reduced, vocabulary but they tend to be very literal so for many (most?) you need to think like a computer programmer. Its easy once you get used to it but its a trap for the newly arrived.
Incidentally, English isn't the only language we (Americans) have 'adapted'.
(**Which really comes in numerous dialects, RP being the 'official' one.)
Seems to be conflating two different things.
Repair is replacing components on something I already have to get back its lost functionality. There is no incentive for the replacement parts to be realistically priced since I already have the "thing" and have a vested interest in avoiding the inconvenience of it not working. It just needs to be marginally less expensive than wholesale replacement. Its quite easy for the replacement cost of several major components to add up to well over the cost of a whole new item, but as those replacements are often spread out over time you might not notice this or you might just accept this.
Buying refurbished is a whole different thing. Someone else has repaired/cleaned up a previously-loved item and borne the cost of the components required. The cost to them has to be competitive against purchase of a new item for this to be a viable venture. Quite a bit more competitive to overcome the stigma associated with "used". Often its the manufacturer themselves doing the refurbishing so unsurprisingly they can get their hands on components at reasonable costs.
Lobbying for removal of VAT just sounds like the manufacturers wanting to keep their spare parts cash cow whilst diverting the blame for over-pricing somewhere else.
Complicated.
We bought a new fridge because a new £5 thermostat was closer to £100. A lot of custom parts are overpriced. Generic parts can be 1p to £1. So in either case the VAT on DIY repairs is irrelevant.
The cost of running a repair shop (training/study time, light, heat, rent and insurance) is high. Also people never coming back. Cheap items you might need to charge more in labour than a new gadget costs. Big items might be repairable, or not worth repairing (old laptop needing too expensive keyboard).
The parts to the repair shop or DIY repair would need to be VAT free. But then all parts would have to be or could be VAT free.
It's workable to have no VAT on labour (should be most of the cost) or secondhand. Manufacturer refurbished VAT free could only apply to out-of-production models or be abused, even that could be abused.
So my take is that only zero VAT on repair labour is viable and that would help small repair shops a little, not the consumer, except by making it likely that there is a repair shop. Their margins are already too poor.
"We bought a new fridge because a new £5 thermostat was closer to £100."
That's what I found for my fridge. But rather than scrapping it, I took the broken thermostat out and ordered a lookeelikee from Amazon for about €12. The wire tube thing is about a foot too long, the excess is dangling down behind the shelves, but otherwise it works fine.
The repair killer may often be the labour cost irrespective of the cost of the part, especially as minimum labour time is often quoted, you pay minimum one hour even if the job is 5 minutes, plus the dreaded “call out fee”, itself payable without the option of taking a fridge to their house or workshop (often a van).
>plus the dreaded “call out fee”,
I think I can see a whole new government policy. Combining eternal favourites 'the big society' and 'conscription(*)'
Electronic and mechanical engineers, along with Windows admins, will be rounded up encouraged to volunteer to go around to people's houses for free and fix their appliances / turn their computers off and on again.
* should the BOFHs be armed ?
"The repair killer may often be the labour cost irrespective of the cost of the part, especially as minimum labour time is often quoted, you pay minimum one hour even if the job is 5 minutes, plus the dreaded “call out fee”, itself payable without the option of taking a fridge to their house or workshop (often a van)."
There's no way somebody can make money billing in 5 minute intervals. The one hour covers phone calls/communications, billing, banking/payment fees and having small bits an bobs on hand such as spare screws and heat shrink. I don't charge a drilling fee, but I might still break a bit or it just gets dull after some uses and needs to be replaced.
Do you really want to haul your major appliance to the shop for repair?
I think we all know why those fees are present. That doesn't change the fact that those fees, and by extension the need for repair techs to charge them, are high enough that it makes repairs expensive and less likely. It doesn't mean we have to find a way of eliminating them and there's little chance that we can. However, when discussing how we can encourage people to repair rather than replace their possessions, we have to understand why they don't. The high cost of labor means there is a floor for the price of a repair no matter how simple, meaning many people will decide that a moderately expensive gamble which might fix their device or might only be the first step before expensive parts have to be purchased or it takes several hours is not worth it when a new replacement could be purchased. In my case, it's much the same, except my alternative is figuring out how to repair things myself. Often, if I can't repair it myself, I assume that calling another repair tech is going to be expensive and doubtful of success because I've already done many of the simplest things, so I am also unlikely to engage the services of one.
It is worth noting that it isn't so much the high unit cost of labour, it's that aftermarket repairs use far more labour time than the equivalent step in any manufacturing process. Manufacturers build goods quickly and cheaply through bulk inventory parts, just-in-time logistics, standardisation, repetition, automation and use of tools and jigs. It is impossible to replicate that with secondhand goods.
Even if you know exactly the fault and you can fix it yourself or get it fixed, there's always the concern as to what will go wrong next. On newish or expensive kit that's perhaps not a worry, but for a six year old dishwasher whose pump has failed, it's a toss up as to whether a replacement drain pump is a sound investment. Or my £140 fridge - fridges are usually very reliable but at that price if anything more expensive than the interior light goes wrong, it's probably worth buying new.
As for "refurbished", my view is that translates into English as "inspected by a bloke on minimum wage, wiped with a greasy rag and reboxed".
Glen-Dimplex owns loads of traditional UK brands, but AFIAK is an international conglomerate with Irish roots outsourcing to China. A Roberts radio has an imitation of a traditional Roberts case and very cheap Chinese radio inside. The brands owned (badges?) used to be quality and repairable.
Some of those companies need to make better quality and more repairable stuff.
Well, Glen Dimplex got the opportunity to repair a lot of their own stuff in this event:
https://www.gov.uk/government/news/opss-intervenes-on-dangerous-glen-dimplex-gas-cookers
And after that they had this to go out and fix this (Belling are a Glen Dimplex brand):
https://www.gov.uk/product-safety-alerts-reports-recalls/product-safety-report-belling-stoves-gas-hobs-gas-supply-elbow-joint-2304-0135
"Well yeah, especially when there isn't anyone who knows how to repair the item anymore."
There are plenty of people that could repair things, but when there's no documentation and no parts, too much of the time one would need to tell the customer that their item can't be repaired economically. If I have something special, it's worth the time to scour the interwebs to find a part or get a donor device to grab parts from. That takes time and time is money. For day in and day out repairs, I need to be able to so a quick search for the part and place an order if I don't have it in stock.
Right to repair regulations need to be put in place and tightened up to keep stuff out of landfill. I'm jealous of the Post Apocalyptic Inventor's awesome local "junk" yards where he finds all sorts of power tools that can be refurbished and put working again. Somebody could make a business of that IF they could get parts and sell reconditioned power tools that another company doesn't want any more.
So many household electrical items used to come with schematics and parts lists. There's no reason for them not to. Taking that info and trying to build your own isn't cost effective and the competition is more than capable of reverse engineering so they don't need it. Where the special sauce comes into play is firmware/software which isn't something a repair shop needs if they can get a programmed part/ROM from the factory. I have a couple of items I've bought recently on the workbench (my slow season business) from Roland and DBX. Both have schematics online for free. The DBX DriveRack lost a controller in the power supply which is an obsolete part but I bought some and will get to it soon. The Roland guitar effects processor will take some effort to figure out, but again, free docs. It's also a vintage piece of gear so a repaired one going on the market isn't a lost sale for Roland. Their new products are miles ahead, but some people are looking for vintage so getting something broken for cheap is nice little side business. For Roland, it means more of their gear will remain in use and visible... great advertising.
TV's I wind up turning into other things which still leads to loads of scrap. They're made so cheap that the two things that often need replacing, LED's and the LCD, are a chore to replace and expensive respectively. Without the specialized handling gear, the chance of ruining a new panel is pretty high. Getting a new panel shipped safely is also hit or miss, and expensive.
If the company doing the repair or refurbishment is big enough to be VAT registered then they're obliged to charge VAT to the customer. They'll also reclaim VAT on their purchases so it makes no difference as to whether VAT's charged on components. The most effective way of dealing with this would be to make repair and refurbishment zero-rated services which would mean the the business can be VAT registered, reclaim VAT on its purchases but not charge VAT* to the customer.
Technically they do, but it's zero.
Similar thing in the UK for energy efficiency products like insulation.
Pay some idiot to come around and bodge it for you, he can supply the materials VAT free or reduced, but that's totally negated by the need to pay him for his services. Do it yourself and take time and care over it to make sure its done right and you get shafted by having to pay full VAT.
Why the distinction? Its almost as if the politicians are deliberately trying to direct business to their dodgy mates....
Any product that has some aspect of social good attached to it -- improving living conditions, reducing waste -- should automatically be zero rated. Its pretty bloody simple.
I think it would be immensely helpful if the Draconian rules at "recycling centres" could be reviewed and improved.
It's not just the whole issue of right to repair, modular vs component level replacements (the former typically being an expensive part with minimal labour time vs a potentially very cheap part but more labour time spent to diagnose and fix) and generally the interplay of warranties vs what is considered to be 'economical repair'...
When I was a kid, you could go to the local tip and give them a few quid for just about anything they had there.
These days, once any electronic item has been left there, removal of that item is completely forbidden and they'll cite all sorts of rules as to why this is so.
The trouble is that a lot of decent stuff gets thrown away!
Sometimes it's fully working, sometimes a minor and easily repairable fault or perhaps it's beyond repair but contains really useful/rare spare parts... It might be a really valuable item or something of historical importance. Once it's at the tip it seems it would be irrevocably committed to be destroyed.
So far as I can tell there are no exceptions now - members of the public may not take nor buy these items and I believe that the 'recyclers' often won't care about anything other than the raw materials.
If we're really going to crack the problem of e-waste we need to come at it from all angles. Force the manufacturers to provide technical documentation and supply parts at a reasonable cost. Force the likes of Apple to unlock their obsolete hardware (e.g. iPad/iPod/iPhones becoming bricks merely because they're no longer supported and locked to prevent any alternative use). Force them to build products which are designed to last and to be repaired. And force the local authorities to encourage and support those who wish to repair "waste" items in favour of settling the waste to be melted down.
And perhaps most of all, we all need to change our attitudes towards repairing unglamorous, functional devices rather than preferring everything to be shiny and new.
"Sometimes it's fully working, sometimes a minor and easily repairable fault or perhaps it's beyond repair but contains really useful/rare spare parts."
YES!
I've got a bunch of stepper motors and mechanical parts from old copiers. I have a stock of glass panels that I use for cutting tape (put tape on glass and it's easy to razor). Old scanners often have some great mechanical parts where newer ones aren't often not worth salvaging. In the process, I wind up separating metals and plastics. If there's Aluminum bits, I recycle those separately when I have a good box full to take in. There's a box that's collecting parts to build a solid state laser engraver/cutter. Other than the laser head, most of it will be salvaged parts. I've done up a Win7 PC I got for free that will be the controller.
"They usually had the windows licence key on them still so I had a large surplus for people."
A second business a client of mine has is doing senior moves and part of that is liquidating estates. I often get older PC's from him since he trusts me to wipe or destroy drives to keep sensitive data from being published. When I have a spare day, I go through the computers and get them set up to give away. There's plenty of poor families in town whose kids need a computer for school. I'm not a church goer myself, but I know those that are and they can always find somebody deserving that could use a computer and isn't too fussed about maximum performance. Parks and Rec used to have a program for kids to learn how to work on computers, but there hasn't been a budget for those programs for a few years now or I could donate a lot of stuff for them to recondition.
"The workers at our local tip seem to spend the majority of their time fishing stuff out of the skips and putting it to one side..."
That's as it should be. The tip should be seen as a place where unwanted materials go so others can pick them up for reuse at a good price. Our local second hand shop is like that. The owner collects items being given away from estate clean outs and takes donated things. She resells them to earn back enough to pay the store's bills and make some money. A few of the shop assistants volunteer their time or take items as payment. I find it a great place to find bits and bobs when I have a mad project I want to do on the cheap. The last time I was there I found a kitchen appliance that had the power lead I needed for something else I had. I bought a deep fryer at another sale that didn't come with a lead and couldn't find the proper one anywhere at the sale so I figured I'd just get one from eBay or something. How do you describe something like that in a way that a search routine would find? I did find one, buy they wanted the moon for it, plus shipping. I expect that if I knew what other appliances used the same lead, I could find it much cheaper.
So you not only want the government to deliver you free parts to your door but you also want the government to pay you money for doing your job, despite being a private company that's already being paid for people to repair their electronics?
If this also includes paying your company Pub tab then it sounds like something certain BOFH would come out with.
I'm a Sole Trader working in PC and hardware setup, install and repair. I'm not VAT registered, so will they just send me a cheque each month? :-)
More than likely, this will only benefit the larger businesses and squash the local suppliers. Hopefully they will just make "IT Components" VAT free, so everyone can benefit.
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