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Builders urge VAT cut for home improvements

Tuesday, 29 November 2011 12:05 PM

Cut VAT on domestic repair, maintenance and improvement works to five per cent and create 100,000 construction jobs by 2020.

That's the message from the Federation of Master Builders (FMB) ahead of today's Autumn Statement by chancellor George Osborne.

The FMB published research on the impact of the cut estimating that over the next year alone it would create 26,600 jobs in the construction industry and 34,400 in the wider economy.

It argues that the cut would help both homeowners and landlords and councils and housing associations by reducing the costs of improving homes.

And it would help protect consumers by eliminating the tax advantage enjoyed by cowboy builders who accept cash in hand.

The research shows that the immediate effect of a VAT reduction would be a net revenue loss to the government in 2012 of between £161million and £864 million, the move would provide a total economic stimulus in the region of £1.7 billion in 2012 alone.

Brian Berry, director of external affairs at the FMB, said: "One of the biggest benefits of cutting VAT from 20 per cent to five per cent from the government's point of view is the boost it could give to its flagship programme the Green Deal as a VAT cut would act as an incentive to homeowners considering energy efficiency home improvements to their home."

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