Government must slash refurb VAT to boost economy by £15 billion
We think VAT on home improvements should be cut. It's good for the economy and good for homeowners.
March 3, 2014
A VAT reduction on housing renovation and repair could boost the UK economy by more than £15 billion from 2015 to 2020 according to a new independent research report by Experian. This reduction could also create more than 95,000 jobs and save 240,000 tonnes of CO2 from thousands of homes.
The HomeOwners Alliance, along with more than 60 charities, trade associations, business groups and financial institutions are united in calling on all three main political parties to commit to this VAT reduction in their 2015 General Election manifestoes.
Brian Berry, Chief Executive of the Federation of Master Builders (FMB), said: “A VAT reduction on housing renovation and repair work will empower home owners to contribute to growth, jobs and greener homes without placing a burden on the Treasury. There is no other proposal that will help the UK achieve so many of its economic, environmental and social aims with so little cost to the public purse. This research shows that the wider benefits of a VAT reduction on housing renovation and repair would stimulate more than £15 billion of wider economic activity, which completely overshadows any direct losses to Treasury coffers due to a drop in the percentage charged for VAT.
Berry added: “It is a myth that EU law prevents the UK government from reducing VAT on housing renovation and repair. This research report clearly shows that almost half of EU member states are currently enjoying the economic, environmental and social benefits that this VAT reduction can bring. Why should the UK not follow suit?”
Paula Higgins, Chief Executive of the HomeOwners Alliance added “If the Government is serious about reducing the cost of living and helping hard working families, cutting the tax on home repairs is a simple and immediate way to do it. When the Isle of Man did it, the Government found it was such an economic boost that it paid for itself.”
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