A coalition of construction industry interests is calling for the Chancellor of the Exchequer to cut VAT to 5% on building repair and refurbishment work in his Budget tomorrow.
The Construction Products Association, the Federation of Master Builders, the Royal Institute of British Architects and the Royal Institution of Chartered Surveyors have together written to the Chancellor arguing that a cut in VAT would help kick start the British economy. to 5% for property refurbishment
Michael Ankers, chief executive of the CPA said: “The Chancellor has a unique opportunity to take advantage of the recent EU decision allowing Member States to reduce VAT on services, and cut the current rate of VAT to 5% for all private housing repair and maintenance work. This will provide a far more effective fiscal stimulus than many of the other measures the government is considering.”
Louis Armstrong chief executive of the RICS said: “Making it cheaper to repair and maintain homes will help bring empty properties back into use and encourage people to take advantage of energy saving measures such as insulation. Reusing empty homes improves communities, minimises waste sent to landfill and reduces carbon emissions from the transport of construction materials.”
Richard Diment, director general of the FMB said: “Research carried out by University of Oxford calculates that the potential market for the refurbishment of existing homes to improve their energy efficiency is worth between £3.5 and £6.5 billion, which would be a significant boost to the construction sector providing thousands of new jobs at a time when they are needed more than ever.”
Sunand Prasad, President of the RIBA said: “The European Construction Industry Federation (FIEC) has shown that the experiment of reduced VAT rates for the restoration and maintenance of dwellings in Belgium, Spain, Italy and Portugal created almost 170,000 permanent additional jobs. In France the scheme resulted in a €500 million net increase in tax yields, disproving the argument that the scheme would burden public finances.”
The Get Britain Building coalition have also written to the Chancellor urging him to act now to reduce VAT and help to stimulate the housing market.
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