To follow Paul Hyett’s article (aj 27.11.97) and to adapt the pm’s recent request, we need to campaign for a level playing field in the application of vat to the design and construction industry.
I can think of two areas: first that highlighted by Paul Hyett and David Rock, in which the design team work at risk for the client, who then, if the scheme goes ahead, novates them and all their fees plus vat to the contractor, who can offset them against his vat.
Secondly, if it is a new-build housing scheme, he does not recharge the fees vat back to the client. However, if a repair or refurbishment of housing is involved, the client has to pay vat on everything involved with it, hence you can compare new-build bed space costs for early 90s schemes of £8014, £4900, and £6461, with refurbishment bed space costs, plus vat, of £7933 and £8931, and be unsurprised by the decline in the number and size of refurbishment schemes.
The government might also note that zero vat on the repair and refurbishment of rented housing must surely help to reduce rent rises and hence the growing cost of housing benefit.