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Budget 2009: RIBA coalition urge VAT cut on repairs

A coalition of construction industry big hitters, including the RIBA, has made a last ditch plea to the chancellor to cut VAT to five per cent for domestic refurbishment and renovation work

The call comes just hours before the chancellor delivers his budget on Wednesday (22 April) and is being backed by Construction Products Association (CPA), the Federation of Master Builders (FMB) and the Royal Institution of Chartered Surveyors (RICS).

It is the first time all four organisations have come together to lobby the chancellor, Alastair Darling, and follows the EU decision in March allowing Member States to reduce VAT on from 15 to five percent for all ‘private’ housing repair and maintenance work

The consortium claims that trials elsewhere in Europe have shown VAT cuts can create thousands jobs and that a similar decrease in the UK could help to fend off the predicted 300,000 job losses here.

RIBA president Sunand Prasad, said: ‘The European Construction Industry Federation (FIEC) has shown that the 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.’

The group are also claiming that research, carried out by the University of Oxford, has identified a potential market for the refurbishment of existing homes to improve  energy efficiency is worth between £3.5 and £6.5 billion.

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