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The time is now right for VAT cut on renovation work - FMB

The time is now right for VAT cut on renovation work - FMB

1 February 2020 Email this article

Commenting on the recommendation in today’s final report of the Building Better, Building Beautiful Commission that VAT on repair and renovation work should be zero-rated or at least charged at 5%, Chief Executive of the Federation of Master Builders, Brian Berry said: “I am glad the Commission has highlighted the perverse situation where people are incentivised to demolish old buildings, rather than restoring them, due to our archaic VAT regime, which puts a zero-rating on new build but charges 20% for repair and maintenance. If we want to restore and maintain our beautiful heritage it is vital we correct this anomaly in the tax system.”

Berry added: “The FMB has been calling for a Cut to VAT for many years, but the time really has come to make the cut. With the UK leaving the EU tomorrow we will have far more flexibility over our VAT policy, and this should be right of the top of the UK’s post-Brexit wish list. The clock is also ticking on reaching net zero by 2050 and a cut to VAT will help achieve this. The Commission rightly pick up on the FMB’s research which found that a cut to VAT would lead to a reduction in CO2 of 240,000 tonnes across 92,000 home.”

Berry concluded: “Our only critique of the report's recommendation is that it doesn’t go far enough. The Treasury should cut VAT on all domestic repair and renovation, not just the areas listed in the report. The upcoming Budget provides the perfect opportunity to do this, and to help make the UK a greener and more beautiful place.”