by Mark Johnston
Experts Call for a Reduction on VAT for Home Improvements.
The UK government is about to lift the Value Added Tax (VAT) exemption on listed buildings and this potentially is set to put Britain’s 400,000 listed properties under threat.
From01 October 2012, value added tax (VAT) on all alteration and restoration work to listed buildings will be introduced at 20 per cent. However, owners of listed buildings who received Listed Building Consent before21 March 2012will be exempt from the imposition of VAT until September 2015.
The move could also mean that essential works will no longer be financially viable to most owners and therefore it will leave Britain’s listed properties to fall into disrepair.
James Gray, head of project and building consultancy at Cluttons, stated that, “the responsibilities of owning and looking after often fragile listed properties are demanding enough. Any disincentive will, in the long run, damage our nation’s heritage,”
The lack of funds will also impact negatively on specialist repair and maintenance companies operating in the construction sector.
Therefore the Royal Institution of Chartered Surveyors (RICS) is now calling for a reduction in VAT on home repairs and improvement work.
The National Federation of Builders (NFB) has too called for the tax to be cut to 5 per cent after it released figures showing that construction output fell year on year in January.
Sameena Thompson, External Affairs Director at the National Federation of Builders (NFB), said: ‘It is worrying that construction continues to have a hard time weathering the economic storm. Overall output has fallen, and it is clear that the industry is now feeling the full brunt of the public sector cuts.
Research shows that five per cent VAT across the board would create 26,560 jobs in the construction sector with a total economic stimulus of around £1.7 billion in 2012 alone.
Many experts feel that a 5 per cent value added tax (VAT) on home improvements would also bring thousands of empty properties back in to use, improve the energy efficiency of housing stock and possibly reduce the incidence of fuel poverty, help those that can not afford vital repairs to their homes and finally protect consumers and legitimate businesses by significantly reducing the competitive advantage of rogue traders.
Peter Bolton King, global residential director at the Royal Institution of Chartered Surveyors (RICS), said “the government has missed a golden opportunity to create a level playing field on all residential works.”
The proposed reduction to value added tax (VAT) could also ultimately bring much increased revenues to the treasury by encouraging spending and thus kick starting economic growth, according to many house builders.
The reduction is a very possibly proposal as the european union (EU) has changed the law to allow member states to permanently reduce VAT to 5 per cent in this area in order to support economic growth.
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