I would have liked to see the Chancellor address the inequality in VAT between new builds (0%) and renovations (rated at 20%) in today’s Budget, but to not even mention housing at all was totally bizarre. The VAT system as it stands, is a complete muddle, particularly from a building practitioners point of view.
“For new builds, it is clear cut, but when it comes to listed buildings and accessibility projects, there seems to be no hard and fast rules for professionals on those which are rated at 0% and those which are not. George Osborne made the peculiar decision to increase the amount of VAT relief on maintenance work to listed buildings in 2012, but not to any new work. We are still reeling from this. If we want to maintain the country’s built environment and heritage, the Chancellor should be looking at a new VAT regime.
“As it stands, there is still lots of building work going on, but if the economy changes I’m sure many people will decide not to build simply because of the cost. Or much of this work will start to be fuelled by the black economy, with plenty of cash being exchanged for domestic building work, extensions and alterations.”