FSB calls for VAT break on renovation projects

Date: 21st May 2009

Small business leaders have called on the government to give those firms operating in the struggling construction sector a much-needed VAT break.

Research carried out by the Federation of Small Businesses (FSB) found that 56 per cent of small construction companies have seen a downturn in trade over the last six months.

Notably, many of those companies questioned for the study pointed to the 15 per cent VAT rate on home renovation work as a major issue, with many believing that this added cost is deterring homeowners from signing up to projects.

As such, the FSB has joined forces with the Federation of Master Builders to step up pressure on the government to lower VAT levels for renovation projects to a flat rate of just five per cent in order to get the sector moving again.

"Lowering the VAT rate on home renovation projects will encourage people to spend their money and give a vital kick-start to the important, but currently beleaguered, construction industry," explained John Walker, national policy chairman for the FSB.

"It will also help the government to meet its carbon emission targets by encouraging green home renovations."

Just last month, the FSB also argued for the introduction of a new 'go-between' body aimed at helping small business owners rebuild their relationships with banks.