Waste not, tax not; using taxes to encourage recycling

/ Business and Economy, Government, Tax

Author: Henry Ejdelbaum

Tags: fashion, recycling, social benefit

Recycling is on the up. As new technologies develop and more countries sign up to environmental agreements, there have been leaps and bounds in the usage of recycling across the UK. However, one area in which we’re still falling down is in the world of clothing. Every year, £140m of clothes are sent to landfill in the UK, and our consumption of new clothing is the highest in Europe. That’s a lot of clothes that are just going to waste, and with the rise of “fast fashion”, it’s only set to get higher.

But how do we combat this problem? Well, one suggestion by the Environmental Audit Committee, a group of MPs, is to put a penny tax on all new clothes sales in the UK. Adding a penny to the cost of individual items might not seem like it will raise a huge amount in theory, but in practice it could raise over £30m. Since the tax would apply irrespective of the cost of the item, the lower value, higher quantity nature of many clothing retailers means that a penny every time could easily add up. The extra money raised would go into paying for more collections and better recycling systems.

We’ve talked about how tax breaks have been used to incentivise social change before. However, it’s great to see examples of potential tax raises being used for a good purpose.