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The Federation of Master Builders, the voice of the UK's small and medium sized builders, was pleased with the proposed changes in the VAT regime announced by the Chancellor today.
The cut in VAT to 5% from April 2001 for the conversion of residential property into flats is a significant move on the road to a permanent reduction for all RMI work. The immediate tax relief to property owners for the cost of converting redundant space over shops and other commercial properties into flats for letting is also welcome.
Proposals to remove or reduce stamp duty and introduce incentives for redeveloping contaminated land and a reduced rate of VAT on church repair work is similarly good news.
However, the Federation will not let up on its campaign for a lower rate of VAT for all RMI work to remove the difference between the rate charged on renovation work and that charged for new housing. New housing is currently zero rated.
There is a huge backlog of repair work required on the nation's housing stock. The punitive rate of VAT applied to repair and maintenance work deters owners from carrying out repairs.
Levying VAT on domestic repair and maintenance work also encourages avoidance activity such as 'cash in hand' trading that helps cowboy operators.
For further information contact Ian Davis on 020 7242 7583.
First posted: 13 November 2000. Last modified: 17 November 2000.
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