Built Environment Forum Scotland (BEFS), Scotland’s link body for the sector, is seeking to widen support for the 2010 ‘Early Day Motion’ (EDM) in Whitehall, on cutting VAT for repair and maintenance, by asking Scottish MPs to sign up to the Motion, and encouraging others to promote it to their MPs.
The IHBC supports the initiative.
Craig Stirrat, Director of BEFS, has written to Scottish MPs as follows:
‘On behalf of the Built Environment Forum Scotland, I write to ask for your support for a permanent cut in VAT from 20 per cent to 5 per cent for all building repair and maintenance work. The difference between having to pay 20 per cent VAT on building repair work and not having to pay any VAT on new buildings has many perverse consequences.
Before the rise in VAT to 20 per cent, it was estimated that rogue traders stole £170million annually from unsuspecting homeowners across Britain. Rogue traders flourish by evading VAT and offering the customer a cheaper deal as a result, but without a proper written contract the enforcement of consumers’ rights becomes almost impossible and getting the job put right by a replacement builder can cost thousands of pounds extra.
Reducing the rate of VAT on building repair work to 5 per cent will significantly reduce the commercial advantage of those operating in the black economy and help create a level playing field for bona fide construction firms.
Effective enforcement of the existing VAT law is not a viable option, as it would mean a VAT inspector in every home. Cutting the rate of VAT is the only way to ensure the eviction of rogue traders. We have seen recently on the Isle of Man that a reduced rate of VAT in this area is likely to lead to a reduction in the size of the shadow economy, and could even result in an increase in total sales and total tax output from construction.
11,400 jobs will be lost in the construction sector over the next decade because of the rise in VAT. Instead, cutting VAT on building repairs would generate up to 24,200 new jobs the first year alone. It would stimulate the demand for energy efficiency improvements and help the Government achieve its target of cutting carbon emissions by 80 per cent by 2050. It would also help those who cannot afford vital repairs to their homes, bring empty properties back into use, protect the countryside and help to tackle fuel poverty at a time when four million households cannot afford to heat their homes and fuel bills are rising.
On March 10th 2009 the Ecofin Council gave EU Member States the right to permanently reduce the rate of VAT from to 5 per cent, which means the Government has a unique opportunity to kick-start the economy and raise the standard of living for millions of people.
I would be grateful therefore if you could sign EDM 59 – VAT on Repairs and Maintenance to Existing Buildings, and write to the Chancellor of the Exchequer, George Osborne MP to bring the matter to his attention.’
Early day motion (EDM) 59, on ‘Value Added Tax on Repairs and Maintenance to Existing buildings’ was tabled on 25 May 2010 by BobRussell but has to date only received limited support.
The motion states:
‘That this House supports calls from the Federation of Master Builders for a reduction in the rate of value added tax (VAT) to five per cent. on building repair and improvement work to existing buildings; believes that reducing VAT on repairs and maintenance to existing buildings would benefit millions of UK home owners by getting rid of rogue builders, helping those who cannot afford vital repairs to their homes, bringing empty homes back into use, and protecting the countryside and UK heritage; considers that reducing VAT to five per cent. in this area would also make it easier for home owners to make energy efficient repairs and improvements to their properties, thus helping to make the UK’s existing building stock greener and more energy efficient; and notes that, with buildings responsible for 40 per cent. of the UK’s total carbon emissions, this measure would go some way in helping the Government to meet its target of a 60 per cent. reduction in UK carbon emissions by 2050.
For the Early Day Motion see: http://www.parliament.uk/edm/2010-11/59
For BEFS see: www.befs.org.uk
