Cut the VAT open letter to chancellor on renovations

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This is a policy we at support cutting the VAT will encourage people to carry out those small an d medium size renovations and extensions which will filter down through the economy.

This is what Paula Higgins, Chief Executive of the Home Owners Alliance had to say,
“If the Government is serious about reducing the cost of living, cutting the tax on home repairs is a simple and immediate way to do it,”

“It is ridiculous that hard-pressed home owners living in cold, draughty, leaky and cramped houses are being taxed by the Government for trying to make their homes fit to live in,” continues Paula. “Many home owners can only afford to do essential repairs and maintenance by going to the black market, making honest home owners dishonest.”

I personally agree with everything she and the others are saying but would like to add that while new homes are vat exempt and receive many benefits renovations are still penalised by this tax burden.

Loyd Grossman, Chairman of The Heritage Alliance, another of the signatories to the letter, added: “Compared to other EU countries, we have a much higher proportion of older properties, and many are in desperate need of renovation and repair. A reduction in VAT would certainly help kick-start a big increase in this type of work, and would lead to an enormous improvement to our existing buildings. I believe maintenance, repair and renovation is a crucial issue, and urge the Government to act.”

Brian Berry, Chief Executive of the Federation of Master Builders (FMB), said: “The Chancellor should empower home owners to reduce the amount of energy they use. Cutting VAT on domestic building work from 20 to 5 percent will encourage more people to commission refurbishment work and at the same time improve the energy efficiency of their homes.

“Government must give families some control over their seemingly ever-increasing energy bills. Switching suppliers or taking out a long-term fixed tariff can protect against sudden price increases, but the cost of heating our homes is set to rise exponentially for years to come. The only way to stem, or even reverse, these rises is to have new glazing, better insulation or more efficient heating systems installed.”

The letter is as follows

As members of the Cut the VAT Campaign Coalition, we urge you to reduce VAT on all housing renovation
and repair work from 20% to 5% as part of your suite of announcements at the forthcoming Autumn
Statement on 5thDecember.
By levying VAT at 20% on allhousing renovation and repair work,the Government is exacerbating a number
of serious economic, environmental and social problems. Introducing a reduced rate of 5% VAT is a simple
and extremely effective way of achieving a number of the Government’s goals.
At a time when economic growth is still tentative, a cut in VAT
would provide a huge economic stimulus.Independent research by Experian showed
that a targeted reduction in VAT to 5% would provide a total economic stimulus of over £20 billion by 20201. The
same research by Experian stated that this reduction would create more than 32,000
extra full-time equivalent construction jobs by the end of 2015 Equally as pressing is the need to br
ing down the cost of living for individuals and families. A single cut in VAT on housing renovation and repair
work would help millions of households to upgrade their homes to make them more energy efficient. Without
such help to reduce energy use, the number of households living in fuel poverty will continue to grow as
more and more people struggle to protect themselves against this latest
increase in energy prices. This would not only reduce the cost of living but also help the Government meet
its carbon reduction targets by reducing the emissions from our existing housing stock.
This is why an alliance of more than 60 charities, trade associations and business groups be
hind the Cut theVAT Campaign are calling for a reduction in VAT to 5%
on housing renovation and repair.