Contractors call for new VAT cut

Date: 12th March 2009

Electrical contractors have demanded the government slash the rate of VAT to just five per cent.

According to the industry, reducing VAT by a further ten points on housing refurbishments and maintenance would create thousands of British jobs, reported Contract Journal.

Stakeholders in the sector claim that an aggressive cut to the taxation would encourage homeowners to spend and ultimately boost capital flows.

Head of commercial contractors at the Electrical Contractors Association, Martin Wade, told Contract Journal: "This move will reduce the amount of work cheaper, unregistered 'rogue' traders will receive and increase work for bona fide contractors as they will be able to pass on the VAT cuts to the customer."

He added that extending the VAT reduction would also "increase the gover tax take" for the government.

The British Retail Consortium called on Westminster to prolong the VAT this week, claiming that it would save businesses approximately £90 million.