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The Federation of Master Builders (FMB) has branded the VAT legislation for refurbished buildings as 'absurd' after it was revealed that a new school in Lewisham, south London, had demolished a new sports hall and rebuilt it to avoid paying £4 million in VAT.
Andrew Large, Director of External Affairs for the FMB said: "This is a truly disgraceful waste of public money. We do not blame the school for looking to save money but we point the finger at the government for not cutting VAT on refurbishment when all the evidence we have presented shows a range of benefits to public sector building projects. We have been lobbying government to reduce the VAT rate for refurbished buildings and this case puts into sharp focus exactly what we have been talking about.
I'm sure that this is not an isolated example. If the government cut VAT on refurbishment projects we have calculated that not only would it be more cost-effective for the public sector to carry out improvements to hospitals and schools but local housing stock would be improved and more decent affordable homes made available to local people.
Throughout the election the FMB will be continuing its campaign to convince current MPs and candidates standing for election that VAT on building should be reduced to avoid this sort of scandal.
First posted: 21 March 2005. Last modified: 21 March 2005.
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