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Beauty commission calls for zero VAT on retrofit projects

09 housing under £5 million
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The government’s beauty commission has called for VAT on retrofit projects to be slashed to incentivise the reuse of existing buildings

The existing system, where retrofit projects are charged 20 per cent VAT while new builds go tax-free, discourages renovation and reuse, argues the Building Better, Building Beautiful commission.

‘We would like the government to consider the alignment of VAT treatment of repair and maintenance work for existing buildings with construction of new buildings,’ said the commission’s chair, Nicholas Boys Smith.

The commission said the move would not only prevent historic buildings from being demolished but would also be more sustainable and more in line with the principles of a circular economy. 

The measure has repeatedly been called for by architects and heritage groups. Arboreal Architecture’s Harry Paticas recently launched a petition calling on the government to zero-rate tax on retrofit.

The tax rethink is one of 30 ‘policy propositions’ in the commission’s wide-ranging interim report Creating Space for Beauty, which was published earlier this week. 

In addition to calling on councils to name and shame bad schemes – a measure it trailed on Tuesday –  the commission proposed that only ‘beautiful’ homes should receive government funding.

’The delivery of beautiful and resilient places should be made a condition of targeting of government subsidy and grant regimes,’ the commission said.

The report also calls for ’proper procurement’, saying the process has become ‘unwieldy’ and that it wants to see design outcomes weighted as heavily as other outcomes.

It said: ‘The commission would like at the next stage of our work to explore specifically Design and Build and other forms of construction contracts and their impact on out-turn build quality.’

It also called for design review but not from ‘on high’, greater enforcement to ensure planning proposals get built as approved, and encouragement of mixed-use and ‘gentle density’ schemes.

The report has been welcomed by RIBA president Ben Derbyshire, who praised it for ‘giving the subjective “beauty” some meaning’, while Design Council chief executive Sarah Weir said there was ‘much to welcome’ in its findings.

The commission’s final report is due to be published before the end of the year.

Among the recommendations: 

Ask for beauty. Beauty and placemaking should be a collective ambition for how we move forward and a legitimate outcome of the planning system. This should be embedded prominently in the National Planning Policy Framework (NPPF), associated guidance and encouraged via ministerial statement. 

Rediscovering civic pride in architecture. Public-sector procurement of buildings should place major focus on beauty, placemaking and civic pride. Public engagement, citizen involvement in scheme selection and data on local preferences should axiomatically inform this.

Don’t subsidise ugliness. The delivery of beautiful and resilient places should be made a condition of targeting of government subsidy.

Planning excellence. There is an urgent need for more high-quality planning, landscape and urban design skills within local authorities. 

A common understanding of place. The university curriculums for architects, planners, surveyors, highways engineers and builders should all include some elements of placemaking

Proper procurement. More work is required on this topic but we would wish to see design outcomes weighted as heavily as other outcomes.

Moving the democracy upstream from development control to plan-making. The quality and breadth of public engagement with the plan making (as opposed to the development control) process is not good enough 

Empowering communities. Consideration needs to be given to how ‘right to transfer’ regulations and the upgrading of the right to buy assets of community value could further strengthen the growing community-led housing movement

 

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