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The Federation of Master Builders (FMB), the voice of the UK's small and medium sized builders, welcomes the latest regeneration measures outlined by the Chancellor in his Budget speech yesterday.
The extension of the 5% rate of VAT to the conversion of non-residential property into dwellings and the conversion of dwellings into new residential communal homes and houses in multiple occupation (HMOs) are positive steps towards a permanent reduction for all repair, maintenance and improvement (RMI) work.
Following the Pre-Budget Report (PBR) announcement of a zero rate for the sale of renovated residential houses that have been empty for 10 years, the news that renovations of houses empty for three years or more will qualify for a 5% rate of VAT represents significant further progress towards the objective of 5% VAT on all domestic RMI work that FMB has championed.
FMB regrets that the Government is unable to introduce the reduced rate of VAT on repairs to listed buildings that are places of worship, but applauds its flexibility in offsetting this with a grant scheme.
It will be recalled that FMB supports the measures relating to Stamp Duty, contaminated land, reduced VAT rates on the conversion of residential properties into flats and tax relief on flats over shops announced in the PBR.
In welcoming the latest moves towards a universal rate of 5% on all RMI work, FMB's National President, Gordon Marjoram, said: "FMB will continue to campaign hard for a lower rate of VAT on all RMI work to narrow the gap that currently exists with zero-rated new housing. If the huge backlog of repairs to the nation's housing stock is to be tackled, it is imperative that such a measure is introduced very early in the next Parliament".
Ian Davis, Director General of FMB, said:
"This budget continues the steps called for by FMB towards a 5% VAT rate on all domestic RMI work. Levying the punitive 17.5% standard rate only encourages consumers to evade payment by dealing in cash and often puts them into the hands of the rogue trader".
First posted: 19 February 2001. Last modified: 9 March 2001.
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