Support for VAT cut

The Labour Party’s announcement to support a VAT cut to 5% on domestic Repair Maintenance and Improvement (RM&I) works is welcome news to the building industry, the Federation of Master Builders (FMB) said.
 
Richard Diment, FMB director general, responding to the speech from the Shadow Chancellor, Ed Balls, to commit to a VAT cut as part of the Labour Party’s five point plan to revive the UK economy said: “A targeted cut in VAT for home improvement works makes good economic sense as the total stimulus effects of such a cut would be more than double any net loss to the Treasury as well as helping to create tens of thousands of new jobs.

“This policy makes sense on every level. It supports economic policy by creating jobs and generating growth; it supports environmental objectives by helping to bring derelict homes back into use thus taking pressure off the green belt land to provide new housing; and it tackles rogue traders and tax dodgers by reducing their competitive advantage over legitimate businesses.”

Michael Levack, chief executive of the Scottish Building Federation, also supported the move, but had reservations. “I only regret that he proposes to limit the reduction to a year,” he said. “On the Isle of Man, the positive economic impacts of reducing the VAT rate on this category of spending to 5% were such that a decision has now been taken to make the reduced rate a permanent fixture of the tax system.”