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‘Cut VAT to help the trades’
A senior quantity surveyor is urging the Government to reduce VAT on property renovations to help the sector grow. Tim Phillips, a Homebuilding & Renovating Show expert and quantity surveyor, believes reducing VAT to 5% on home improvements could unlock construction projects and support local businesses.
The addition of VAT to home improvement jobs adds a significant financial burden that, for many families, can be the difference between going ahead with essential improvements and putting projects on hold.
Tim said: “VAT at 20% is frequently the difference between a home extension or renovation proceeding or being postponed or cancelled altogether. A £100,000 construction project immediately becomes £120,000, even though the homeowner cannot reclaim any of that tax. Reducing VAT to 5% would save £15,000. That is a meaningful reduction which could unlock projects as well as potentially open new doors for works, support local builders and create opportunities for apprentices throughout the construction supply chain.
“The current system also appears inconsistent as a qualifying new home can be zero-rated, while improving and extending an existing property generally attracts VAT at 20%. Making better use of the homes we already have should not be treated as the less favourable option.”