Cut the VAT: A proposal for building back better and greener
This report in partnership with RICS shows that a temporary five year cut would generate an economic stimulus of £51 billion and unlock 345,000 jobs, in construction and the wider economy.
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Our campaign
A national survey by the HomeOwners Alliance, Resi architects and YouGov found that 5.3 million UK homeowners pay cash for home improvements, in order to avoid VAT and make them more affordable. Meanwhile, VAT costs are deterring almost a quarter (23%) – roughly 4 million – of homeowners from improving their homes.
An independent research report conducted on behalf of the FMB and more than 60 supporting construction organisations, found that cutting VAT would generate a total stimulus of more than £15.1bn in the UK economy. It would also create a total of 95,480 extra jobs.
Our resources
An estimate of the effects of a reduction in the rate of VAT on housing renovation and repair work
This report from Experian demonstrates that a targeted reduction in VAT from 2015 to 2020 could bring with it economic, social and environmental benefits.
Cut the VAT to unleash green housing revolution, party leaders urged
VAT cut on home improvements could generate £15bn in new taxes, create 95,000 jobs and unlock £1bn green revolution.
How we are representing your views
- In 2015, we worked with more than 60 organisations to commission independent research into the economic effect of cutting VAT.
- For the past five years, we have been campaigning for the Government to cut VAT on home improvement works to 5%.
- We know this is important to FMB members. 64% of members said the single biggest change the Government would make to help their businesses would be a cut in VAT on repair, maintenance and improvement to 5%.
- The FMB joined a campaign in partnership with the British Property Federation during the 2019 General Election, writing to all the Party Leaders asking them to speak for cutting VAT.
- The FMB included this key ask in our submission to the Government’s Comprehensive Spending Review.
- FMB Scotland secured support from the Scottish Government, and the Minister for Local Government, Housing and Planning wrote to the UK Government requesting that they consider this policy.
Key achievements
- The Building Better, Building Beautiful commission, an independent body that advised government on how to promote and increase the use of high-quality design for new build homes and neighbourhoods called for a cut in VAT on repair and maintenance in their report Living with beauty.
- Scottish Minister, Kevin Stewart MSP wrote to the Chancellor in August 2020 requesting "that the UK Government reduces to 5% the VAT that requires to be charged when existing buildings are repaired, maintained or improved."
- The Construction Leadership Council’s Domestic RMI working group supports the call for a temporary cut in VAT to 5%.
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