The construction industry has delivered a united call for the Chancellor to cut VAT to five percent for property refurbishment in his budget next Wednesday.
The Cut the VAT coalition, which unites organisations such as the Construction Products Association (CPA), the Federation of Master Builders (FMB), the Royal Institute of British Architects (RIBA) and the Royal Institution of Chartered Surveyors (RICS), said by cutting the tax from 15% to 5% the Chancellor could kick start the British economy and create thousands of much needed jobs.
Sunand Prasad, President of the RIBA added his voice by saying that the European Construction Industry Federation (FIEC) had shown that an experiment of reduced VAT rates for activities relating to 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,” he said.
“Cutting VAT would help bring empty homes back into use and increase supply while housebuilding is at a record low level,” said Louis Armstrong Chief Executive of the RICS.
European finance ministers agreed in March that EU member nations could reduce the VAT rate on private housing refurbishment work to 5%.
The Cut the VAT Coalition is made up of 19 varied organisations.
