Federation calls for Government action on VAT

The Federation of Master Builders (FMB) has criticised the Government’s failure to address the issue of VAT on domestic repair, maintenance and improvement (RMI) work.

While the FMB has welcomed recent changes to VAT, most notably the extension of a 5 per cent rate of VAT on the conversion of non-residential property into dwellings and the conversion of dwellings into multiple occupation, this figure falls short of the universal rate of 5 per cent on all RMI work for which the Federation has campaigned.

The Federation has also continued to stress that what it describes as “the current punitive rate” of 17.5 per cent supports the rogue operative to the detriment of the professional builder. According to the FMB, such a level encourages the employment of cash-in-hand cowboy builders who perform second-rate jobs that leave the customer no opportunity for redress – and which also cause the Treasury to lose some £43 billion in tax evasion.

Gordon Marjoram, National President of the FMB, commented: “Reducing VAT would encourage customers to use bona fide firms rather than taking the cheapest option. These customers then have the temerity to complain about the rogue traders that they themselves have encouraged and employed.

“It would actually improve the Treasury’s tax take by brining more work into the legitimate economy. This view is borne out by experience in other EU countries and indeed closer to home in the Isle of Man.

He added: “The European Commission supports our aims on VAT. At the moment seven European countries have reduced the rate for RMI - the sooner that the Treasury makes it eight, the better.” (CL)