Calls for VAT to be reduced on home renovations

Posted on 28/05/2009

The Federation of Small businesses (FSB) has called on the Government to follow suit with the EU and decrease VAT on home renovations to around 5%.

The FSB has been lobbying for a change for quite a long time claiming this would help spur the dwindling construction sector in the UK. As much as 67% of construction companies are suffering from the recession and any similar measures could help give new life to the industry.

The fall has been mainly due to reduction in demand. Many people are unwilling to renovate. A lower VAT could spur this in the favor of construction companies and help improve the property market indirectly as well.

John Walker, the National Policy Chairman for FSB has mentioned “Confidence in the smaller building projects around the country has dropped to a low and people who were thinking of adding an extension to their home, renovating their bathroom or building a garage, should be given the incentive to go ahead”

He also said that more than 300,000 jobs in the construction sector hang in the balance and more of an effort is needed y the UK Government to remedy the situation.

There is really very little reason for Britain not to follow suit with the EU as this would help a lot in improving the current situation.

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