Cutting VAT

Industry calls for Government to reduce VAT on repairs

Members of the construction and KBB industries have called for a reduced rate of VAT on repairs, maintenance and management of homes from 20% to 5%.

The Federation of Master Builders (FMB) and the British Property Federation (BPF) sent a joint letter to the Conservative, Labour, Liberal Democrat and SNP parties asking for a cut on VAT in home improvements.

The two federations claim that a VAT cut could generate £15 billion in new taxes, create 95,000 jobs and unlock a £1bn green revolution.

Cutting VAT on repairs and maintenance was first called for in 2015 and had the support of more than 60 charities, trade associations and business groups.

The Bathroom Manufacturers Association (BMA) sees this proposal as a way to extend the lifespan of a product, which it says will have significant environmental implications.

BMA chief executive Tom Reynolds said: “It is even more important four years on, as such a substantial cut would improve the sustainability of bathroom products through an extension of their life cycle, ensuring they remain water-efficient.

“Doing something about our leaky and inefficient existing housing stock with the increased use of more water and energy-efficient bathroom products would go a long way to helping reducing the UK’s carbon emissions.

“The letter includes some powerful arguments on how this move would help us reach our net-zero carbon targets, increase investment in housing and stimulate the economy. I hope that the potential future leaders will respond and make this long for change a reality for the new government.”

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An environmental argument was also put to political parties by the FMB and BPF as domestic buildings are responsible for 20% of the UK’s carbon emissions and cutting this VAT could encourage homeowners to improve its insulation and make the house more energy-efficient.

Brian Berry, chief executive of the FMB, said: “An amazing 20 million floors, eight million lofts and five million cavity walls are in need of insulation across the UK, according to the Government’s own figures. The four main parties must go further in their policy pledges to promote and incentivise energy-efficiency works.”

Other organisations were in support of the proposal. Anna Scothern, chief executive of the National Home Improvements Council, said she hoped that this proposal would “put a stop to the grey economy”. The Royal Institute of Chartered Surveyors’ Northern Ireland policy manager Patrice Cairns said: “Retrofitting provides an opportunity to achieve significant embodied carbon savings.”

Melanie Leech, chief executive of the BPF, said: “Reducing the rate of VAT on all repairs, maintenance and management of residential property would support the greening and improvement of our housing stock, and help the build-to-rent sector deliver more homes. We therefore urge the next government to support the ‘Cut the VAT’ campaign.”

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