House Builders Call For VAT Cuts In Spring Budget

Almost two thirds of small to medium-sized construction companies are calling for the governing body to exert their new independent muscles by announcing a cut in VAT on home repair and renovation works.

The Federation of Master Builders (FMBs) survey resulted in 212 out of 357 small to medium-sized building companies have highlighted VAT cuts in March’s Spring Budget as the best approach to encourage renovation works, helping to kick start order books and embed a culture in homeowners of improving their buildings in order to contribute to environmental targets.

The FMBs are urging the government to reduce the labour element of Vat from 20 per cent to 5 per cent on renovation and repair works on domestic dwellings.

The press release also alludes to the government’s desire to retrofit older homes to become more energy efficient, citing the deadline to ensure all properties hit an EPC standard C by 2035 as a target that will not be met unless the 71 per cent of homeowners currently living in homes failing to meet this standard are incentivised to make affordable changes.

The FMB are also asking the government to support SME house builders by reforming planning fees, creating incentives for low carbon house building pioneers and reviewing ‘the UK Apprenticeship Levy to ensure construction has the skills it needs.’

Brian Berry, Chief Executive of the FMB, said:

“The new Chancellor has a unique opportunity in his first Budget to signal a green, positive outlook for builders who are critical to delivering the homes and infrastructure this country needs.

“The fact that nearly two-thirds (59%) of builders say cutting VAT would boost their business sends  a clear message to the Government that if it is wants to deliver sustained economic growth in our building industry this is the single best policy change to achieve that.

“We need a National Retrofit Strategy that sends homeowners and landlords a strong signal to invest in their properties, reduce costs, and cut carbon. Cutting VAT is the key to unlock this and set us on track to achieve Net Zero by 2050 by saving almost 240,000 tonnes of CO2 from 92,000 homes.

“That means we need to urgently insulate eight million lofts, eight million solid walls and five million cavity walls. Making homeowners more likely to take these steps by cutting VAT would give the Government a good news story ahead of hosting the UN Climate Change Conference (COP26) later this year.”

Today's Conveyancer